I don’t need to look at my risk register, I did that last year…
As a Trustee of a charity, you should be regularly reviewing and managing the risks that the charity faces. A useful tool for managing risks is a risk register, which lists the key risks and the measures to mitigate these risks. It is considered good governance for a charity to create a risk register. One way of creating a register is as follows:
- Identify the risks.
- Give each risk a score out of 5 for both likelihood of occurrence and severity (5 being the most probable/most severe).
- Multiply these two scores for each risk to arrive at an overall risk score (out of 25). This will help to prioritise the risks.
- Make a note of the consequence of each risk.
- Come up with some preventative action for the risks. In some instances there may be little preventative action, and therefore trustees may simply decide they have to accept the risk exists.
- It may be appropriate to assign the monitoring of certain risks to a trustee or member of staff.
Once created, the risk register should be a live document that is regularly reviewed and updated. Changes to internal and external factors will mean that the risks will rarely stay the same. Some risks may no longer be relevant, whilst new risks will occur and will need to be recorded and assessed. It is recommended that the register is discussed regularly at Trustee meetings so that Trustees are pro-active in the risk assessment process. Discussion and openness should be encouraged. As has been seen in recent high-profile cases, it doesn’t take long for a missed risk to become a bigger problem for the charity and to potentially result in Trustees becoming liable.
If you require assistance in creating a risk register for your charity or have any queries on this subject, please get in touch with your usual Kreston Reeves contact or email firstname.lastname@example.org.
To learn about our specialist services visit our charities webpage here.
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