Risk management and the board

Key messages

Board members should have a basic understanding of how to assess and manage risk using the accepted methods and tools for the task.
Boards manage risk at a high level, but for the entire organisation nonetheless.
The Department of Health & Human Services provides support to build risk management skills.

Victorian health service boards are responsible for risk management for their services. Standardised tools are available to make the job of measuring, recording and managing risk easier.

Responsibilities in managing risk

Under the Health Services Act 1998 (s. 65S(2) the boards of public healthcare services have to:

monitor the performance of the health service to ensure effective and accountable risk management systems are in place
ensure the Minister for Health and the Secretary are informed in a timely manner of any issues of public concern or risks that affect or may affect the health service.

Health service boards are responsible for:

approving risk appetite and tolerances
approving risk escalation and reporting protocols
approving policy, strategy and procedures
reviewing the organisation's corporate risk profile
determining resource allocations.

While there is no legislative requirement in place for the boards of public hospitals and multipurpose services, these organisations should adopt the provisions in the Act as good practice in risk management.

Key areas of risk for health services

The term ‘risk management’ applies to all activities of the organisation. They key areas of risk are:

strategic risks relating to the organisation’s reputation or achievement of its plans
governance and compliance risks relating to governance frameworks and accreditation
operational risks relating to the delivery of core business that could include clinical care, workforce, information systems and service model
financial risks relating to viability, funding, grants and fund-raising.

Risk management workshops

The Department of Health & Human Services runs regular risk management workshops to help board members build their risk management skills.

Reviewed 18 October 2024

Health.vic

Contact details

Health Service Governance Unit Department of Health & Human Services

healthservicegovernance@dhhs.vic.gov.au