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Catastrophic Risk in Local Government Units: Search for Optimal Risk Management

In: EU Crisis and the Role of the Periphery

Author

Listed:
  • Krzysztof Łyskawa

    (Poznan University of Economics)

  • Marietta Janowicz-Lomott

    (University of Gdansk)

Abstract

The multiplicity of meanings of the word “risk” used in the literature and risk management standards lead us to a question about the possibility of creating a universal definition and its application in the risk management process and the implementation of the agreements of insurance. The authors point to the basic elements of such a definition. But above all, in the article the concept of risk in relation to local government units has been operationalized. Based on a survey, the authors made the identification of events that the head of local government units is afraid of. Additionally, there is specified level of losses that officials in charge of local governments consider catastrophic. Based on studies and analysis of government documents, the article demonstrates significant gaps in the identification and financing of catastrophic phenomena. Local government entities do not take action within the risk management process relating to catastrophic risks, even in the narrow sense, especially referring only to the effects of nature. It should be noted that the application of the procedures of risk management has been imposed on local government by the Act of August 27, 2009, the Public Finance Act, which introduced the obligation for public sector entities management control, as one of its objectives is to provide the risk management. The authors’ risk management model is based on the concept of “risk owner”, which was first defined in ISO 31000. This standard contains numerous links between risk management and the management of the entire organization. This relationship may involve both strategic and operational areas. Detailed activities are based on the separation of areas where risks are identified or created. In the next step the risk is assessed by a series of questionnaires and interviews with employees in a lower-level unit of local government. The end result is recommendations for further action, which should be consistent between different areas.

Suggested Citation

  • Krzysztof Łyskawa & Marietta Janowicz-Lomott, 2015. "Catastrophic Risk in Local Government Units: Search for Optimal Risk Management," Contributions to Economics, in: Anastasios Karasavvoglou & Serdar Ongan & Persefoni Polychronidou (ed.), EU Crisis and the Role of the Periphery, edition 127, pages 115-129, Springer.
    • Handle: RePEc:spr:conchp:978-3-319-10133-0_7
    DOI: 10.1007/978-3-319-10133-0_7
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