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Transfer
Transfer the risk to a third party (e.g. outsourcing) or transfer the consequences of the risk to another (e.g. insurance).
For example: if you own a care home, if you are concerned that you are unable to cope with the consequences of having to comply with current legislation, you might outsource the operation of the care home to a third party management company. If you are concerned about the risk of re in your properties, you are likely to take steps to transfer the risk to an insurer by taking out appropriate insurance.
Whatever action you decide to take, it should be proportionate. It is therefore worth considering the nancial impact of potential risks. For example, if there is a risk that something may happen very infrequently and the impact will be minimal, there is little point spending vast sums of money on putting in place safeguards to prevent the event from ever occurring. You would not spend £1 million to prevent losing £10. Sometimes it is acceptable to simply decide
to do nothing.
You should also decide who will be responsible for “owning” each of the identi ed risks. Who will take the appropriate actions needed to monitor and put in place appropriate responses?
You should also consider whether it may be appropriate to have a disaster recovery policy or a business continuity plan, which outlines the steps you would take in the event of a signi cant major disaster or catastrophe.
HOW SHOULD WE RECORD THE POLICY?
You should set out the charity’s risk management policy in an appropriate document.
This should have an introduction setting out:
The charity’s approach to risk, and the importance the charity trustees place on this issue
The parameters applied by the charity, i.e. is it accepted that some risks are unavoidable
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Chapter 10
