Over the last few days I have received a couple of emails from two experienced CEOs that brought bad news.  They wrote to me to tell me that within months, their charities would be closing or merging with another organisation, and they would be looking for another position.  This isn’t the first time that such news has arrived in my in-box over the last 18 months - it is a story which now seems to be one which is increasing in its regularity.

Supporters, funders and beneficiaries of these two charities would be justified in asking whether the two CEOs and their Boards took unnecessary risks which ultimately led to the demise of their organisations, with the consequent withdrawal or severe reduction of the services and support they offered.

One of the Board’s most important governance responsibilities is to safeguard the organisation’s resources, both human and financial. 

Implicit, however, in every act of ‘charity’ is risk, so the concept and understanding of ‘risk’ should be one which is written into the very DNA of every charity, every Board of Trustees, every CEO, every member of staff and every volunteer - but do they all really understand the risks the charity faces and how those risks should be addressed?

One method of communicating the commitment of the charity to take risks but at the same time manage potential organisational threats, is to establish a risk-management policy and embed this into the strategy and activities of the organisation.

By putting a risk-management policy in writing, there will be available to all a statement which reflects the organisation’s mission and purpose, the activities it engages in and the actions that others throughout the charity can take to contribute to the organisation’s risk-management efforts.

The preparation and writing of a risk management policy can in and of itself act as a catalytic discussion for a Board and enable it to reassess the state and standing of the organisation and what the future might hold for it. 

So go on, take a risk ...

 Author: Quentin Elston