Governance and Risk Management: The Challenge of Accountability, Transparency and Social Responsibility

Abstract

The introduction of performance measurement to the public sector cannot be separated from two other developments. First, the growing mistrust of the public in government use of tax resources. These sentiments resemble the attitudes of the Principal towards the Agent in the presence of Agency relation. Second, the paradigm shift from “governing” to “gover-nance” where the state must delegate or allow other public and private entities to carry out certain functions that used to be part of central government responsibilities. This paper points out that as a result of this shift to governance due attention must be given to risk management not only by government but also by other participants in the governing process. Paying such attention is consistent with the challenge of governments to meet the desired norms of account-ability, transparency and social Responsibility.