annual conference b2: risk management for leaders | ncvo

RISK MANAGEMENT FOR LEADERS

KATE SAYER

20 APRIL 2017

Dinner sponsors:

Media partner:

Partner sponsor:

AGENDA

Focus on managing risk How risk management is relevant to leaders Talk about culture Think about risk-taking And more…

RISK MANAGEMENT PROCESSES

Talk to your neighbour 3 minutes each way How is risk managed in your organisation?

HOW DO YOU DO IT?

TRADITIONAL APPROACHES

Identify all the risks you can think of Rank them for impact and likelihood Multiply the factors to prioritise risks Present in a risk register Variations on this?

RISK REGISTERS

TYPICAL RISK MANAGEMENT

RISK AVERSEARE BOARDS REALLY THE PROBLEM?

CULTURE CREATED BY RISK REGISTERS?

7

LEADING RISK MANAGEMENT

Trustees

Audit committee

Middle managersSenior managers

Strategic risks• External• Outside your control• Possibly high impact

Operational risks• Internal• Within your control• Possibly high probability

MitigationResponse plans

Reduce likelihoodFramework of

controls

Management assurance on control

Active, regular

monitoring

STRATEGIC RISKS

Often external Need to monitor regularly Focus on high impact risks and scrap the

ranking Talk about how you would respond if that risk

event materialised – rehearse Clear responsibility for developing response

plans and implementing

STRATEGIC RISKSTHE BIG FIVE

OPERATIONAL RISK ASSURANCE Managing day-to-day risks is part of the normal

management job Describe the actions and processes in place to

manage risk Map to the risks Identify gaps or overlaps Notes on further actions or changes Annual sign off Provide training and coaching

RISK POLICY

Policy should describe attitude to different areas of risk Where it is appropriate to take risks Level of risk that is acceptable in different

scenarios Communicate the risk policy Review strategic and operational risk in the

context of the policy

RISK-TAKING – NOT RISKY

RISK FOR INNOVATIVE ORGANISATIONS Starts with risk policy Project management tools Pilots Feedback mechanisms Pre-mortems Multi-disciplinary teams Finance team engagement

RISK CULTURE IN INNOVATIVE ORGANISATIONS Feedback not failure Fail quickly Reward the right behaviours People are well-intentioned Talk about the strategy Devolved structuresTheory Y organisations as described by Douglas McGregor in “The Human Side of Enterprise” 1960

SUMMARY

Do you discuss your big risks regularly with senior managers and the Board?

Do you have response plans for major strategic risks?

What is the culture being created by your approach to risk management? What do you want your culture to be?

Where do you want to be risk-taking? Where should you accept risk?

QUESTIONS FOR LEADERS

MORE INFORMATION

Rethinking risk: beyond the tickboxFree to download on our website

www.sayervincent.co.ukContact

Kate.Sayer@sayervincent.co.uk

“Discipline makes daring possible”

Dr Atul Gawande – 2014 Reith Lectures – “The Century of the System”

17