Abstract
We report dynamic changes in the priorities for strategic risks faced by international water utilities over a 10year period, as cited by managers responsible for managing them. A content analysis of interviews with three cohorts of risk managers in the water sector was undertaken. Interviews probed the focus risk managers' were giving to strategic risks within utilities, as well as specific questions on risk analysis tools (2005); risk management cultures (2011) and the integration of risk management with corporate decision-making (2015). The coding frequency of strategic (business, enterprise, corporate) risk terms from 18 structured interviews (2005) and 28 semi-structured interviews (12 in 2011; 16 in 2015) was used to appraise changes in the perceived importance of strategic risks within the sector. The aggregated coding frequency across the study period, and changes in the frequency of strategic risks cited at three interview periods identified infrastructure assets as the most significant risk over the period and suggests an emergence of extrinsic risk over time. Extended interviews with three utility risk managers (2016) from the UK, Canada and the US were then used to contextualise the findings. This research supports the ongoing focus on infrastructure resilience and the increasing prevalence of extrinsic risk within the water sector, as reported by the insurance sector and by water research organisations. The extended interviews provided insight into how strategic risks are now driving the implementation agenda within utilities, and into how utilities can secure tangible business value from proactive risk governance. Strategic external risks affecting the sector are on the rise, involve more players and are less controllable from within a utility's own organisational boundaries. Proportionate risk management processes and structures provide oversight and assurance, whilst allowing a focus on the tangible business value that comes from managing strategic risks well.
Highlights
Water utilities manage risk and opportunity every day, delivering safe, wholesome drinking water that has the trust of customers; and treating wastewaters to protect the environment from pollution (Rouse, 2008)
We report dynamic changes in the priorities for strategic risks faced by international water utilities over a 10 year period, as cited by managers responsible for managing them
We draw on in-depth interviews with self-selecting water utility risk managers interested in implementing risk management
Summary
Water utilities manage risk and opportunity every day, delivering safe, wholesome drinking water that has the trust of customers; and treating wastewaters to protect the environment from pollution (Rouse, 2008). They do so against a background of (i) demanding regulatory commitments to achieve the required water quality and environmental protection standards (Allan et al, 2013); (ii) increasing political pressure to demonstrate organisational resilience to business threats (e.g. Ofwat, 2015); and (iii) within a context of rapidly changing workforce dynamics (Black and Veatch, 2015; Water Research Foundation, 2015). Water utilities demonstrate resilience across their enterprise; a requirement increasingly coordinated by the utility's ‘risk manager’, ‘group risk manager’, or ‘head of assurance’
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