BIG FUTURES FOUNDATION POLICY STATEMENT ON RISK MANAGEMENT
(Reviewed November 2022)
Big Futures Foundation (BFF) trustees will regularly review and assess the risks faced by the 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 BFF are to achieve their key objectives and safeguard their charity’s funds and assets.
BFF’s risk management framework allows trustees to:
- identify the major risks that apply to BFF
- make decisions about how to respond to the risks they face
- make an appropriate statement regarding risk management in their annual report
Risk is used in this policy to describe the uncertainty surrounding events and their outcomes that may have a significant impact, either enhancing or inhibiting any area of a charity’s operations. This risk may be financial or non-financial.
The aim of this policy is to ensure that:
- significant risks are known and monitored, enabling trustees to make informed decisions and take timely action
- the charity makes the most of opportunities and develops them with the confidence that any risks will be managed
- forward and strategic planning are improved
- the charity’s aims are achieved more successfully
Risk Management Procedures
At BFF, risk management is incorporated into management processes and is reviewed by trustees, covering the following stages:
- Identifying risks
- Assessing risks
- Evaluating what action needs to be taken on risks
- Periodic monitoring and assessment
This ensures that:
- the identification, assessment and management of risk is linked to the achievement of the charity’s objectives
- all areas of risk are covered – for example, financial, governance, operational and reputational
- risk exposure that reflects the trustees’ views as to what levels of risk are acceptable
- the principal results of risk identification, evaluation and management are reviewed and considered
- risk management is ongoing and embedded in management and operational procedures
BFF regularly reviews and assesses the risks it faces in all areas of its work and plans for the management of those risks, ensuring that the charity is fit for purpose. These considerations will inform the trustees in their decision as to the levels of risk they are willing to accept. Risks will be identified in terms of the potential severity of their impact and likelihood of their occurrence.
Evaluating what action needs to be taken
Where risks are identified, the trustees will need to make sure that appropriate action is being taken to manage them. This review should include assessing how effective existing controls are.
The following are examples of possible actions:
- the risk may need to be avoided by ending that activity (e.g. stopping work in a particular location)
- the risk could be transferred to a third party (e.g. outsourcing contracts to a third party)
- the risk could be shared with others (e.g. a joint venture project)
- the charity’s exposure to the risk can be limited (e.g. establishment of reserves against loss of income)
- the risk can be reduced or eliminated by establishing or improving control procedures (e.g. internal financial controls)
- the risk may need to be insured against
- the risk may be accepted as being unlikely to occur and/or of low impact and therefore will just be reviewed annually
Once a risk has been evaluated, the trustees will draw up a plan for any steps that need to be taken to address or mitigate significant or major risks. Trustees will communicate with staff as necessary to ensure that individual and group responsibilities are understood and embedded into working practice.
A review of our Risk Management Policy and Procedures will take place every year and will be ratified at a meeting of the Board of Trustees.
Annual monitoring of risks by trustees will be supplemented by interim reports during trustee meetings.
Signed by Chief Executive Officer
Dated: 14th November 2022