Risk management is a Board-level strategic duty for charity trustees, as stated in the Charity Commission guidance, The Essential Trustee (CC3), and equally important for all Boards in seeking to achieve their strategic objectives. It enables greater understanding of organisation-wide challenges and opportunities and how these can be better managed.
Since the publication of the Statement of Recommended Practice in 2000, charity trustees have been required to make a statement about risk in their Trustees’ Report. Charities SORP (FRS 102) updated the requirements and now states that charities must have “a description of the principal risks and uncertainties facing the charity and its subsidiary undertakings, as identified by the charity trustees, together with a summary of their plans and strategies for managing those risks.”
Our Better Risk Management guide provides a detailed overview of the risk identification, assessment and management process. Beginning with an overview of ways to define and identify different risks, the guide then delves into traditional and modern risk scoring techniques before concluding with an insight into setting risk appetite and monitoring.
Vodcast
In this vodcast, the Better Risk Management authors, Naziar Hashemi, Partner, Head of Social Purpose and Non Profit and Richard Evans, Partner, Head of Risk and Assurance come together to discuss key elements of risk management, the importance of integrating risk management processes and understanding into organisational culture, and practical insights on how organisations can enhance their risk management processes. Watch now to understand further how to bring risk management to life in your organisation.
Inevitably, a perfect solution to mitigating risks may not be possible. In some cases the charity will be unable to control the likelihood of a risk crystallising, but risk management should aim towards being able to control the impact of these risks.
Once the risks are identified they will need to be assessed, prioritised and categorised based on their significance and likelihood. Often charities put undue effort into reducing risks with low significance and likelihood.
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