Assumption Risk & Traceability Check (Informational)

⚖️ Governance Five™ © / Power Group Purchasing™ © 2010–2025
Lawfully authored Australian Governance & Stakeholder-Engagement System – Govern → Engage → Aggregate → Deliver → Evolve™

General information only. This page is an awareness tool to help organisations reflect on where they may rely on assumptions rather than traceable governance. It is not a diagnostic, audit, or compliance instrument and does not provide legal, regulatory, financial, assurance, or consulting advice. Use of the Framework remains subject to licensing. Use under licence only.

Why focus on assumption risk?

Many organisations have good intentions and extensive documentation, yet still carry assumption risk – places where decisions, practices, or claims rely on “this is how we have always done it” rather than clear, traceable governance.

Governance Five™ © does not replace laws, regulators, or standards. It provides a single, licensed governance flow – Govern → Engage → Aggregate → Deliver → Evolve™ – that helps organisations connect mandates, participation, evidence, delivery, and learning into a visible structure.

This page helps boards, executives, public bodies, institutions, and community leaders reflect on where assumption-based governance may exist, and where traceability could be strengthened in their own context.

Important boundary note: The examples and questions on this page are hypothetical and illustrative only. They are not findings about any particular organisation. This page is not legal, regulatory, or professional advice and does not measure compliance or performance.

What do we mean by “assumption risk” and “traceability”?

Assumption risk (for reflection)

For the purposes of this page, assumption risk refers to situations where key aspects of governance rely on:

“Everyone knows how this works” without current documentation.
“We have always done it this way” without a clear, authorising mandate.
Verbal understandings that cannot be easily verified or tested.
Informal workarounds that have replaced earlier, documented processes.

Traceability (for reflection)

For this page, traceability means the ability to:

Show where a decision, rule, or practice originated.
Identify who authorised it and under which mandate.
Link evidence and participation records to that decision.
Demonstrate how delivery and learning connect back to the original governance structure.

These definitions are provided only for the internal use of this page. They do not alter the meaning of any legislation, standard, or regulatory term.

Using a traffic-light lens (internal only)

Organisations may choose to apply an informal Green / Amber / Red lens to the reflection areas below to guide internal discussion. This is not a score or rating – it is simply a way to highlight where assumptions may be stronger than traceability.

🟢 Green – Mostly traceable

We can locate up-to-date documents, records, and decisions that show how this area works in practice.

🟡 Amber – Mixed or patchy

Some documentation and clarity exist, but there are gaps, inconsistencies, or heavy dependence on specific individuals.

🔴 Red – Largely assumption-based

We rely mainly on habit, verbal understandings, or “everyone knows this”, with limited or outdated records.

1. Decisions & Mandates – “Everyone knows who decides that” ▾

Assumption risk can arise when organisations rely on a shared, informal understanding of who decides what, rather than clear and current delegation instruments or mandates.

Are delegations of authority for major decisions (financial, procurement, ESG, community impact, strategic partnerships) clearly documented and accessible?
Could a new director, senior manager, or regulator understand our decision-making structure by reading our documents, or would they need to “ask around”?
When decisions are escalated or made urgently, do we record who authorised them and on what basis, or does this remain largely informal?
Do any important decisions rest on historical practice (“the same committee has always done this”) without a current authorising record?

Reflection: A high level of informal delegation or unclear escalation pathways may indicate assumption risk at the Govern stage of Governance Five™ ©.

2. Processes & Workarounds – “This is how we actually do it” ▾

Over time, organisations often develop informal workarounds that differ from the documented process. These may be helpful in the short term but can create assumption risk if they are not reflected in governance structures.

Are there areas where staff say “The policy says X, but in practice we do Y because it is faster or easier”?
Have temporary practices – for example implemented during a crisis – become permanent, without a clear decision to adopt them?
Do internal systems, templates, or forms reflect current governance expectations, or are they lagging behind?
Do we have any “shadow processes” for approvals, risk sign-off, or stakeholder engagement that are not visible in our formal frameworks?

Reflection: Persistent workarounds may signal that governance frameworks and actual practice are out of alignment, increasing assumption risk in the Engage and Aggregate stages.

3. Data, Metrics & Reporting – “The numbers speak for themselves” ▾

Assumption risk is not limited to decisions and processes. It can also appear in data and reporting, especially where metrics are taken at face value without clear links to governance and method.

Do we understand how key metrics are defined and calculated, or do we simply reuse inherited measures?
Are ESG, impact, or capability metrics clearly linked to authorised governance structures, or are they treated as standalone dashboards?
Can we show how data used in reports was checked, challenged, or contextualised before being relied on at board or executive level?
Do we distinguish between data used for internal learning and data used in public claims or regulatory disclosures?

Reflection: Heavy reliance on metrics without a clear governance story behind them may increase assumption risk across the Aggregate and Deliver stages.

4. Roles, Capability & Dependence on Individuals – “Talk to that person, they know” ▾

In some organisations, critical governance knowledge sits with a small number of experienced people. This can create concentration risk if the structure is not documented and shared.

Are there key decisions, processes, or relationships that depend on one or two individuals “who know how it works”?
Do we have succession and handover practices that include governance knowledge, not just operational tasks?
Would our governance structures remain clear and functional if those individuals were on extended leave, retired, or moved roles?
Is there a culture where people feel able to ask “why do we do it this way?” without it being seen as a challenge to authority?

Reflection: High dependence on individual memory or informal authority may indicate assumption risk at multiple stages of Governance Five™ ©, especially Govern, Deliver, and Evolve.

5. External Partners, Suppliers & Outsourcing – “The contract covers it” ▾

Outsourcing and partnerships can introduce assumption risk if governance responsibilities are not clearly traced between the organisation and external parties.

Do contracts and partnership agreements clearly reflect the governance expectations set at board or executive level?
Are there areas where we assume “the supplier will manage that risk” without explicit governance arrangements?
When external partners deliver services that affect communities, safety, or public value, do we have traceable oversight rather than relying solely on contractual clauses?
Have we considered where licensing, attribution, or method origin may be relevant when partners refer to governance systems, frameworks, or sovereign capability?

Reflection: Assuming that “the contract covers everything” without aligned governance can increase assumption risk in the Deliver and Evolve stages.

6. Incidents, Complaints & Lessons Learned – “We fixed that at the time” ▾

When something goes wrong, many organisations focus on immediate remediation. Assumption risk arises if systemic lessons are not fed back into governance structures.

When we respond to incidents or complaints, do we systematically ask “What does this tell us about our governance and participation structures?”
Are lessons captured in a way that can influence future mandates, engagement approaches, or decision criteria?
Do repeated issues point to areas where governance is implied rather than documented?
Are learnings visible to the right decision-making bodies, or do they remain siloed within one team or business unit?

Reflection: If incidents are treated only as operational or reputational problems, without governance reflection, assumption risk may persist across the Evolve stage.

Organisations that wish to reflect further may use the five stages of Governance Five™ © as a conceptual lens to identify where assumption risk is most concentrated:

Govern: Are mandates, delegations, and authorising environments clearly documented?
Engage: Are stakeholder pathways visible, fair, and recorded?
Aggregate: Can we assemble a convincing evidence trail for key decisions?
Deliver: Do delivery arrangements match what was authorised and communicated?
Evolve: Do lessons and findings feed back into governance, not just operations?

This lens is offered for internal reflection only. Any decision to adopt, align with, or license Governance Five™ © is a matter for each organisation and its professional advisors.

Recording and using your reflections

Some organisations may find it useful to record assumption risk reflections alongside their broader readiness work, using simple headings such as:

Area (e.g. Delegations, Workarounds, Metrics, Partners, Learning)
Traffic light (Green / Amber / Red – internal judgement only)
Key assumptions identified
Existing traceability (what already exists in documents or systems)
Potential follow-up (for discussion with the relevant committee, team, or advisor)

Any such record should be treated as an internal reflection tool, not as a formal assessment outcome or certification. Decisions about change, remediation, or licensing remain entirely with each organisation and its advisors.