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Managing risk

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Identifying and managing risk is a key charity or non profit board responsibility.

All organisations, regardless of size or the area they operate in, face risk. It could be the risk of losing money, injuring clients, bad publicity, or losing key staff or volunteers. 

The board can take steps to:

  • avoid or reduce risk
  • transfer it (for example by taking out insurance, such as from NCVO’s Trusted Supplier Zurich Insurance)
  • accept some risks, with a plan for how to manage the possible consequences if the risk happens.

It’s worth seeing if others face similar risks to you and how they've dealt with them.

Trustees are ultimately responsible for the charity and should take the lead in ensuring that risk management is approached comprehensively and that it permeates all aspects of the charity’s operations.

What can help the board?

A board that is aware of its responsibilities and works on being effective is more likely to look strategically at the risks facing the charity. A board that reviews its responsibilities regularly is more likely to be aware of the risks facing the board and the effective governance of the charity.

When looking at risk, members of the board should ask themselves these questions.

  • When did we last carry out a risk management exercise?
  • Do we regularly carry out a risk management exercise?
  • Do we need to report on risk annually in accordance with the SORP (if appropriate)?
  • Do we act on the findings of the exercise?

The Charity Commission encourages all charities to report on risk and for larger charities it is a legal requirement.

Risk management resources

Use our How to Manage Risk article as a seven-step guide.

NCVO members can also download our risk register template in Tools and Resources.

Find out more

Page last edited Jul 16, 2019

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