Risk Identification Report for proposed Local Government Enterprise (LGE) Run by: Sam Haamid Friday, 27 June 2014 1:12 PM Disclaimer: The following report is a risk identification report only and does not represent nor consider potential risk treatment strategies. Risk treatment strategies would be jointly formulated, agreed and executed by the work up team or (relevant to time horizon) by the LGE once formally established. Risk Identification Report # Risk Description Responsible area Consequence Likelihood Risk level Risk rating 19 Earmarked resources are outweighed The task loading required to manage the Executive Services by operational demand. LGE either initially or as a result of increased (Business service provision by the LGE, outweighs the Compliance/Risk) human and technical resources assigned leading to an increase in those resources and therefore an increase in operational costs. Minor (C) Possible 10.00 Moderate Risk 20 Multiple shareholders prevents Shareholder Councils driven by their own LG Executive Services success due to differing individual political environment seek to manipulate the (Business shareholder objectives and or political LGE via the board of Directors or limited Compliance/Risk) appetite. provision financial/physical assets. Minor (D) Unlikely 7.00 Low Risk 21 Multiple shareholders confuses appointment of and or liability for insurance coverage. The extent, placement and responsibility for Executive Services insurance direction is blurred, each (Business shareholder on advice requires differing levelCompliance/Risk) of participatory coverage or assumptions of coverage are made when in reality gaps in coverage exist. Further, insurance premiums cannot be controlled without a supporting risk management framework. Moderate (B) Likely 16.00 High Risk 22 Diversification in LGE service provision is restricted. Although setting out to achieve greater Executive Services success in the shared services space, the (Business legal framework of the LGE prevents Compliance/Risk) (without significant shareholder/board agreement) the diversification of services in the longer term. Moderate (B) Likely 16.00 High Risk 23 Differing shareholder price point expectations. Individual shareholder service (cost to Executive Services customer) structures differ from one (Business shareholder to another to the point where Compliance/Risk) contract terms are difficult to finalize where revenue requirements are higher. Moderate (D) Unlikely 10.00 Moderate Risk 24 Unequal contribution of investment as As shareholders are attracted over a 36 Executive Services shareholder numbers increase. month time horizon, their shareholder stake (Business is disproportionate to the capital investment Compliance/Risk) made by initial founding members. Moderate (C) Possible 13.00 High Risk Run by: Sam Haamid Friday, 27 June 2014 1:12 PM Page 2 of 3 Risk Identification Report # Risk 25 Description Responsible area Consequence Likelihood Risk level Founding member employees acting The number of shareholder employees as Executive Services as board Directors may be considered board members outweighing independent (Business board members may be considered by the Compliance/Risk) a conflict of interest. public as unbalanced and or may lead to an unworkable board seeking to ensure individual shareholder interests. Major (D) Unlikely 13.00 26 Withdrawal of one of a minimum of two shareholders. The viability of the LGE relies on a minimum Executive Services of two shareholders. (Business Compliance/Risk) Major (C) Possible 16.00 High Risk 29 Limited regional market vendors. The "buying power" of the LGE is Executive Services undermined by the reality of a small pool of (Business potential vendors within the local/regional Compliance/Risk) market place for some proposed shared services. Minor (C) Possible 10.00 Moderate Risk 31 Differing shareholder values and strategic objectives. The constitutional and operational footprint Executive Services of the LGE does not align with shareholders (Business agendas. Compliance/Risk) Minor (B) Likely Moderate Risk 13.00 Risk rating Moderate Risk Run by: Sam Haamid Friday, 27 June 2014 1:12 PM Page 3 of 3