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Guest Blog: Risk Management – The Gift of Foresight

16/03/2018

Risk management has never been more critical to the charity and non-profit sector. At the recent safeguarding summit co-hosted by the Charity Commission and DFID, International Development Secretary Penny Mordaunt remarked that although there were examples of best practice “…. overall, there was too little evidence in the areas of robust risk management, comprehensive reporting, responsibility being taken at the highest level for safeguarding, and of beneficiaries always being put first”. But how can a charity respond to and manage these risk exposures?

In this guest blog, Colette Dark of Alarm explains how a robust approach to risk management will protect your charity’s operations and reputation.

The activities of the charity sector have recently been at the forefront of the news for all the wrong reasons.

Headline stories include the sexual abuse committed by charity workers on those they were meant to be helping; high profile fundraising events which encouraged the harassment of young women; the collapse of a charity’s services and loss of jobs due to financial mismanagement; and the inappropriate use and sharing of donors’ personal data. All these situations have at their heart a glaring failure to understand and then manage risk within the charities involved.

Although they’ve dominated the headlines, it’s not only International Aid Charities who are exposed to this risk. Safeguarding is one of a number of risks that should be high on the agenda of many domestic charities.

All too often risk management is regarded as a bureaucratic, back-covering chore that no-one has the time or enthusiasm to engage with. If this is the view held by your charity, then quite frankly you are doing it wrong!

Implemented properly, risk management is a fantastic tool that will deliver a multitude of benefits, including –

The gift of foresight

Even in small organisations, it is difficult for trustees to know what is going on all of the time. A good risk management process ensures that there is a system that encourages any ongoing issues or emerging problems to be raised, discussed and dealt with before it all goes wrong. This means there are fewer nasty surprises and forewarned is forearmed.

A framework for control

It provides a framework for control that can be tailored to the suit the size and complexity of the organisation. It can provide trustees with a method for communicating with those working for the charity (be they paid staff or volunteers) to jointly identify, assess and decide on the appropriate levels of controls needed to manage risk.

Better informed decision making

It provides vital information that helps better informed decision making and helps direct allocation of scarce resources to those tasks and areas of work most in need of the resource. It helps define priorities and enables the charity to take advantage of opportunities.

Better relationship with all of your stakeholders

How you are seen by your stakeholders is of critical importance. This includes your sponsors and donors, statutory bodies, the community and beneficiaries you serve, and the regulator. They want to see a well-managed organisation that understands the risks it is faced with and can evidence the practical steps it is taking to control the risk. Your risk management process can do this. This may be even more critical when tendering to provide services on behalf of statutory bodies. Evidence of a good risk management system can give you a real competitive advantage.

It protects the assets of the organisation

This includes the physical assets (buildings / equipment / vehicles). The human assets, such as the staff and volunteers who provide the service, as well as the people who you serve. But also, very importantly, it protects the reputation of the organisation. It does this because it ensures that you have identified your key risks and then put in place control measures to manage and mitigate the risks.

Community First is offering a one-day practical risk management workshop on 8th May 2018. It is designed to help you to implement or improve your current risk management system so that it delivers real benefits to your charity. To learn more and book a place,

Managing Risk in the Third Sector

 

More about Colette

With over 30 years’ experience, Colette has assisted organisations from many sectors develop and embed robust and practical approaches to risk, safety and resilience management. She is perhaps most well-known for her expertise in insurance liability risk, local and central government, NGO and Third Sector organisations. This has included assignments with major international children’s development charities, development agencies and UK based cancer care and medical research charities.

For 20 years, Colette led Gallagher Bassett’s Risk Control Department with responsibility for business planning, performance management, product development and marketing strategies. As a member of the executive team she shared responsibility for managing the wider strategic direction and governance of the Company’s UK operations.

A frequent speaker at conferences, she has contributed to several thought leadership publications in risk management. During a long association with the Institute of Risk Management (IRM), she has chaired the institutes training committee, authored accredited training programmes and served on the Board as a non-executive director (2011-2014). In 2016 she was invited to join the Board of Alarm (National Forum for Risk Management in the Public Sector) as a co-opted non-executive director. In 2017 she was awarded honorary life membership of Alarm in recognition of the work she has undertaken to promote risk management in the public sector.

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