Page 194 - Demo
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“In Hertford, Hereford and Hampshire, hurricanes hardly happen”
WHY DO CHARITY TRUSTEES NEED
TO WORRY ABOUT RISK MANAGEMENT?
According to the dictionary, risk means the “chance or possibility of loss or bad consequence”. As a charity trustee you are ultimately responsible for anything that happens in your charity. If something bad happens that has consequences for the charity then potentially you have failed in your duty as a charity trustee. As a charity trustee you are essentially a steward of the charity’s assets for a short period of time, you do not want anything to go wrong on your watch, so you need to take steps to manage all potential risks.
The Charity Commission’s guidance (CC26: Charities and Risk Management) says:
“Charity trustees should regularly review and assess the risks faced by their charity in all areas of its work and plan for the management of those risks. Risk is an everyday part of charitable activity and managing it effectively is essential if the trustees are to achieve their key objective and safeguard their charity’s funds and assets.”
Managing risk is fundamental to ensuring that:
You are able to make informed decisions as a charity trustee about the activities that your charity is going to undertake, as you will understand the potential impact of each activity on your charity
Your charity can make the most of each opportunity it faces by knowing that any associated risks can be managed within appropriate parameters
Forward and strategic planning involving the allocation of resources are improved for the charity, meaning that your charity’s long term aims are able to be achieved successfully
The extent to which your charity faces risks will, of course, depend upon your size, structure and the nature of the activities that you undertake. If your charity is involved in the operation of a care home, or a hostel for vulnerable women, or an educational establishment, the risks faced by the charity may be far more extensive than those faced by a small charity with a few members and a focus mainly on grant giving.
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