IRM Viewpoint - Tackling emerging risk

Tackling emerging risk

IRM guidance offers new insight for charities seeking to strengthen their resilience

Many charities have had a tough time since the pandemic hit early last year. Recent research from the Charity Commission, for example, found that 90 per cent of charities have struggled with issues such as service delivery, finances and staff. A majority (60 per cent) reported a loss of income, and about one in three experienced staff shortages.

But the Commission also found resilience. It is a testament to the determination of charities to serve their stakeholders that only 97 charities said they were insolvent – out of a total of 170,000 on the Commission’s register.

Like other sectors, charities face a wide range of challenges as the risk landscape continues to change – often in unpredictable ways. Supply chain weaknesses, rising inflation and the growing need to accommodate flexible working patterns and look out for mental health issues are all emerging risks.

Embedding risk management

To help charities navigate these changing threats, IRM’s Charities Special Interest Group formed a Working Group to develop and publish guidance on identifying, tackling and finally embedding emerging risk. All three publications are now available on our website (theirm.org).

The publications will help anyone involved with strategic risk management within a charity to identify and tackle potential threats that may impact the organisation’s objectives and provide a solid foundation for managing such risk.

The last publication goes one step further and offers tools and techniques to take that work and embed it within an organisation.

But why embed risk management? Instead of seeing emerging risk management as a one-off or occasional piece of work, the idea behind embedding those tasks is to make them an ongoing part of the organisation’s overall risk management process. Since the risk landscape is always changing, making this a regular focus of the everyday organisational cycle makes sense.

Strategy

In fact, the guidance shows how, treated in this way, emerging risk management can become part of setting and reviewing organisational strategy. In that approach, strategy teams may own and shape the emerging risk management process – with the help of those involved in risk – which in turn ensures the embedding of the emerging risk process in the organisation’s strategy-setting, review and approval process.

While it may not be possible for every charity to adopt this approach. But given the diversity of the sector, we outline other possibilities available to embed emerging risk management.

Each of the publications were developed with the help of a team of people from the sector involved in risk. The members are too numerous to list here, but I would like to thank them for their efforts, and their names are set out at the beginning of each document. We urge all of those working on risk and strategy within the sector – and beyond – to take full advantage of our insights and collective wisdom to help make organisations more resilient in these challenging times.

Alyson Pepperill, CFIRM, is co-chair of IRM Charities SIG.

Download free copies of the guidance here:

An introduction to identifying emerging risks - https://bit.ly/3djE4vX

How to assess and treat emerging risks - https://bit.ly/3ryUdWO

How to embed emerging risk identification and management - https://bit.ly/3ElxhOj