Abstract
Enterprise risk management (ERM) aims to identify, assess, and manage risks across an entire organisation. It is a comprehensive approach that considers all types of risks an organisation may encounter, including financial, operational, and strategic risks. ERM should be used effectively to enhance leadership in South Africa, particularly in local government, to make well-informed decisions, deliver quality services, build trust with citizens, and manage public funds efficiently.
The study analysed how risk management can enhance effective and efficient leadership in local government. Its primary aim was to identify the challenges of implementing risk management and to propose solutions to address them while enhancing leadership in local government. The study addressed the research questions using two theories concurrently, namely decision theory and transformational leadership theory, as the foundation.
This study employed a qualitative method for data collection and utilised thematic analysis for data interpretation. Both primary and secondary data were used. Primary data were gathered through semi-structured interviews conducted with five officials from the Risk Management Department of the City of Johannesburg.
The research found that risk management in local government faces several challenges for effective implementation, including inadequate risk communication, a lack of risk management knowledge, reliance on manual risk assessment, and insufficient resources. The following solutions were proposed to address these identified challenges: capacity building and awareness, improved risk communication, and the application of technological tools in risk management processes.