Written by Sarah Cox, Managing Director of charity and faith insurance specialist, Ansvar
As a specialist charity insurance provider, Ansvar knows that is very important for charities to get the most value from every pound you spend. Ensuring your costs are kept to a minimum means you can spend more on actually helping those who need your support or service.
One of the best things you can do for your charity is to ensure you have a robust risk register, which will minimise the risk of costly unfortunate events that could have been avoided, or at the very least, prepared for.
In this article, we will be sharing how to get started with creating a risk register and expanding on why it is so important to have one.
What is a risk register?
A risk register is a living document that holds your identified risks, their level of concern and assessment details, all in one place, along with what controls and actions you’ve taken against the risks.
Not only can a risk register help you see just how exposed your charity is to risks, it can also support key decision-making and record keeping to evidence how you’ve done your utmost to protect against risk, should anything end up happening as a result.
Being able to clearly see where you need to focus your attention within your charity will save time and money, both of which are incredibly important when you have people who need the support you provide.
Why you need a risk register
A risk register isn’t just a ‘nice to have’ element of your charity’s management. The Government has issued guidance specifically detailing the responsibility of charities to identify their risks and demonstrating how they are managing and monitoring them. You can look it up on the Gov.uk website, just search for CC26.
This document is invaluable because you’ll be able to identify core gaps in the risk you’re exposed to and provides evidence of how you’re managing your risks to help protect everyone involved who could be affected.
How to make your risk register
A risk register might sound a bit ambiguous, but in reality, it’s a spreadsheet (often available as a template from your insurer) which has a row for each risk, and columns for what it is, how big of an issue it could be, what could happen, and measures you’ve put in place.
You’ll want to set aside a few hours to meet with other people from your organisation who can bring different perspectives and concerns. This will help you have a robust view of what risks your charity is exposed to and the actions you can take to minimise the biggest concerns that sit outside of the level of risk you, are prepared to take (your risk appetite).
We suggest writing this down in a rough format to begin with, just get everyone’s thoughts out on the paper, before formatting it into a clear spreadsheet following the discussion. It’s also worth noting that different people will have different tolerances (appetites) for risk, so differing opinions will help you see the risks more objectively.
The most important aspects to consider when assessing risk are:
- The risk itself (inherent risk)
- The causes of that risk
- The consequences if nothing is done to combat the risk and level of impact
- The current controls you have
- Who is responsible for those controls
- The remaining risk once controls are in place (residual risk)
- The action points and deadlines to mitigate high levels of residual risk and put any additional controls in place where appropriate
Once the document has been completed, you should share this with everyone who contributed for final sign-off.
Please remember, a risk register is not the type of thing you can complete once and then file away never to be seen again; this should be a living document that is regularly accessed and referenced.
Your risk register should be an integral part of your organisation and used as a tool to support all strategic and governance activity. We suggest you review it at least once a year, but to be really on top of things, you’d be best placed to review quarterly or following any material change for a more robust and evolving document.
We hope this article has been useful in explaining exactly how important a risk register is for your charity. If you have any questions regarding your risk, we encourage you to contact your insurer or broker to discuss in more detail.