A risky business Civil Society facing tough choices in a new world of risk

  • View
    17

  • Download
    2

Embed Size (px)

DESCRIPTION

A risky business Civil Society facing tough choices in a new world of risk. 2 nd November 2010 Paul Emery Head of Community and Social Organisations Bridget Colloby Marketing Manager. Agenda. Introductions What this session is about Contributor input, group work Feedback and conclusions - PowerPoint PPT Presentation

Text of A risky business Civil Society facing tough choices in a new world of risk

  • A risky business

    Civil Society facing tough choices in a new world of risk.2nd November 2010Paul EmeryHead of Community and Social Organisations

    Bridget CollobyMarketing Manager

    Zurich Insurance Company

    Agenda

    Introductions

    What this session is about

    Contributor input, group work

    Feedback and conclusions

    Wrap

    Zurich Insurance Company

    The two agendas for risk management

    Why should you be interested in risk management?

    Zurich Insurance Company

    Controls / Assurance / Audit / InspectionC2 What are the legal requirements for charities in relation to risk management?

    Charities that are required by law to have their accounts audited must make a risk management statement in their trustees' annual report confirming that

    ...the charity trustees have given consideration to the major risks to which the charity is exposed and satisfied themselves that systems or procedures are established in order to manage those risks. (Charities (Accounts and Reports) Regulations 2008)

    Major risks are those risks that have a major impact and a probable or highly probable likelihood of occurring. If they occurred they would have a major impact on some or all of the following areas: governance; operations; finances; environmental or external factors such as public opinion or relationship with funders; a charity's compliance with law or regulation.

    Any of these major risks and their potential impacts could change the way trustees, supporters or beneficiaries might deal with the charity.

    Zurich Insurance Company

    Is this why for many charitiesRisk management is a paper exercise?

    They feel they gain limited benefit from undertaking risk management?

    It is a once a year process with limited involvement from the Board?

    Zurich Insurance Company

    What is risk based decision making?

    All organisations exist to achieve their objectives.

    The purpose of (business) risk management is to manage the barriers to achieving these objectives.

    Treasury 2000 (OGC)

    Zurich Insurance Company

    There are two types of risks:

    Direct threats (damaging events) which could lead to a failure to achieve objectives.

    Opportunities (constructive events) which if exploited could offer an improved way of achieving objectives , but which are surrounded by threats.

    Zurich Insurance Company

    Business v Operational risks

    Business risksThose which have been identified as potentially damaging to the achievement of the organisations objectives.

    Operational risksRisks which managers, staff and volunteers are likely to encounter in day-to-day work situations.

    Zurich Insurance Company

    What about insurance?Risk Management is not just about insurance

    Zurich Insurance Company

    What is the context?Significant crises impacting on organisations abilities to continue are now becoming one in five year events.

    Hardest hitting recession for many years.

    With funding resources scarce, partners want confidence that you understand and are managing your key risks.

    The charity sector has become one of the major suppliers to Local Government in terms of commissioned services (estimated at over 12bn)

    Society is less forgiving of failure.

    Zurich Insurance Company

    What is your role in this?So, in effect, a [strategic] leader has (only) two jobs??

    Identifying the opportunities that will lead to success(75%of the job)

    Zurich Insurance Company

    What is a business risk? - definition

    Risk is the variation in outcomes around an expectation

    (in effect, risk management is scenario planning and management)

    Zurich Insurance Company

    The two agendasBetter option appraisalImproved forward planningDemonstrateimprovementControls / assurance / audit / inspectionRisk-based decision making

    Zurich Insurance Company

    What risks does your organisation face?

    Zurich Insurance Company

    Think about your organisationsVision

    Objectives

    Strategies

    Plans

    And the potential barriers to success

    Zurich Insurance Company

    Introduction to research reportPublic sector and wider Civil Society scopeResearch undertaken by leading third party research agency, Ipsos MoriDifferent perspectives on long term risks facing the public sector and wider Civil SocietyKey sources Public and Civil Society CEOs, independent risk experts and academics, public poll, Zurich experts

    Zurich Insurance Company

    Risks facing the sector

    Zurich Insurance Company

    Taking the public with youWhich of these statements comes closest to your views on local councils / charities

    Zurich Insurance Company

    People are less likely to volunteer in deprived areas

    Zurich Insurance Company

    CEO viewpoint

    Zurich Insurance Company

    CEOs: Top risk issues

    Budget uncertainty / Loss of funding94%

    Zurich Insurance Company

    The backdrop

    Zurich Insurance Company

    Transition from uncertainty to certainty

    Zurich Insurance Company

    Managing the transition to budget certaintyIn your control

    EmployeesVolunteersWhat you doContracts that you tender forChange managementCost controlSpread of revenue streamsFixed costs

    Within your influence

    Local authority stanceSpending of othersWhat happens re: full cost of recoveryWhat services are requiredLocal community agendaGovernment strategyMemorandum and articles

    Zurich Insurance Company

    CEO viewpoint data security

    Zurich Insurance Company

    Data security whats driving the risk?Transparency OCS wants more!

    Consortia / Partnership working Whos got your data?

    Instant media When things go wrong they go wrong quickly!

    Value of donor base to you and others Cyber attack?

    Measuring impact more and more data, is it secure?

    Technology USB where is yours?

    Zurich Insurance Company

    Data security can you see the risk?

    Zurich Insurance Company

    Risk Data securityWhat are the potential consequences?Reputational Damage

    Public / corporate donorsLocal Authorities and Health providersVolunteersEmployeesTrustees / PatronBeneficiariesThird party suppliersInformation Commissioners Office / Fine

    Crisis response and impact on BAU

    Zurich Insurance Company

    Zurich case study the tip of the iceberg

    Zurich Insurance Company

    Zurich case study the rest of the iceberg!FineAudit and Consulting FeesIndemnity Policies and Claims Identity theft Redress paymentsCustomer Communications ExerciseImpact on BAU

    Employees on project Customer acquisition / retentionOrganisational Change

    Technology costs Ongoing internal comms (cultural shift) New processes and procedures Office adaptations and new equipment Increased operational costs

    Zurich Insurance Company

    Risk data securityIn your control

    Partnership principles and governanceShared services contracts and controlsPolicies on social networking communications frameworkFraud procedures, controls and systemsCrisis planningPublic sector contracts that you tender for.

    Within your influence

    Social networking and new media (external)Emerging fraud

    Zurich Insurance Company

    Conclusions

    Zurich Insurance Company

    How does your original list of risks look now?

    Zurich Insurance Company

    Your organisationsVision

    Objectives

    Strategies

    Plans

    And the potential barriers to success

    Zurich Insurance Company

    The risk management cycle

    Zurich Insurance Company

    Lets do a risk ranking exercise

    Zurich Insurance Company

    Likelihood - definitionLikelihood(over 2 years)

    Very high

    High

    Significant

    Low

    Very low

    Almost impossible

    >90%

    55% to 90%

    15% to 55%

    5% to 15%

    1% to 5%

    0% to 1%

    Zurich Insurance Company

    The risk profile template

    Zurich Insurance Company

    Conclusions

    Any questions / observations

    Tough Choices launches on 8th November 2010

    Access the report via www.NewWorldofRisk.com or complete the form to receive your copy

    Holding slideThe slide is showing whilst Paul talks to the following:

    Budget pressures and the Big Society agenda will lead to both great opportunities and some new risks for CSOs. Reductions in state spending and a push towards localism means the focus will be on CSOs like never before. New opportunities will emerge for voluntary organisations to get involved in delivering public services and running community assets. Many CSOs will find themselves at a crossroads for the organisation; and for those undertaking fundamental changes to operations and activities, a crossroads in regards to risk.Whatever shape public service delivery takes in the future, with it will come a host of risks and challenges. It is crucial that these are fully understood before decisions are made on who takes responsibility for delivery, whether its local authorities or local communities. In handing risk back to the public, the landscape dramatically changes. This report is about the risks emerging over the next five years due to austerity measures, government initiative and policy changes.

    Introduction to the concept of the report and the four perspectives

    Paul to introduce Alyson and the IRMs involvement

    We can start to see the different perspectives here in this table. The expert view is woven into the report as commentary.

    We can see a general area of agreement is concern over funding and donations. And alongside this there is a concern about maintaining quality of services (both CEOs and pub