11th Apr 2019

Did you know that the Charity Commission recommends that all charities should make a risk management statement in their trustees’ annual report?

Although charities that have a legal obligation to be audited must include a risk management statement in their annual report, the Charity Commission suggests as best practice that all charities should consider doing so as risk management is essential for charities to safeguard their organisations.

While most charities are aware of managing risk in relation to health and safety, they may not have considered other common risks that they face such as lack of funding, recruiting and keeping volunteers, data protection and safeguarding to name a few.

As a trustee board, it is important to work together to identify and assess the risks that your organisation may face. These risks can then be documented on a risk register along with any actions that you need to take to reduce them. Once completed the register will need to be regularly reviewed so that risks can be removed if they no longer apply and new risks included as they are identified or at the start of a new project. Having risk management as an agenda item at committee meetings can help manage risks effectively.

To help organisations understand their responsibilities with regards to risk management, the Charity Commission have produced guidance entitled ‘Charities and risk management’ (CC26), on their website here https://www.gov.uk/government/publications/charities-and-risk-management-cc26/charities-and-risk-management-cc26

The Commission recommends that trustees know how to reduce risk, insure against risk and plan how to manage consequences of risks if they occur. While it is impossible to eliminate all risk, it is expected that trustees do their best to manage risks that they face.

Risk Management statements don’t have to be complicated and the Charity Commission don’t have a formula that they expect trustees to complete. They do want organisations to give an overview of the process used to identify risks and show that major risks have been assessed.  They are keen for organisations to explain what control systems are in place to manage those risks.

At Durham Community Action, our Community Development Officers often work with trustees to talk through the expectations of the Charity Commission and support the development of risk statements and processes. The key thing to remember is that trustees have a responsibility to know and understand the risks their organisation may face. 

In addition to our Information, Advice and Guidance services, we provide training for volunteer led organisations on managing risks.  This full day course will support you to look at identifying risks your organisation may face, assessing and scoring these risks and start completing a risk register. The next fully funded ‘Managing Risk’ course is taking place on 21st May; full details can be found at https://www.durhamcommunityaction.org.uk/community-learning-.html

As part of our next Share and Learn Network meeting we will also be discussing risks organisation face such as safeguarding and cyber security, further information will be available on our website shortly.

If you have any questions about your charity's risk management process or would like to discuss a governance review, please don’t hesitate to contact our Communities Team.

Telephone: 01388 742040

Email: info@durhamcommunityaction.org.uk

< Back to posts