All charities face risk. It could be the risk of losing money, injuring clients, bad publicity, or losing key staff or volunteers. Risk is not always a bad thing, without risk there's often no reward.
Identifying and managing risk is important in meeting trustees' duties and demonstrating good governance. Risk management should be an ongoing process of regular review so that trustees can be sure they understand and can manage risks.
It’s good practice for trustees to:
As a part of risk management, the board should also consider what needs to be done if a serious event does take place. Scenario planning can help boards to work through serious risks.
All charities that are under a legal requirement to have their accounts audited and must make a risk management statement in their trustees’ annual report.
Last reviewed: 29 April 2022
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