The essentials of risk management

28 March 2017

In our recent publications we focused extensively on the risk management and assurance process; and the toolkit for what you need to do to create a risk register or assurance map. Download the board assurance toolkit.

Process is a necessity but there is more to be done if your academy trust is to create an environment in which the board, local governing bodies, senior management and staff fully engage with, and make effective use of the risk management and assurance arrangements.

Based on our experiences from across many sectors and business types we have identified some of the key components that create a more dynamic risk managed environment. This will help improve your school risk maturity and outlook.

How to embed risk management – the essentials

Gaining support from the council/governing body and management team in the school

This will create a clear and consistent message on how your school approaches risk management through the adoption, approval and communication of a risk management policy; and this strategy is integral to success.

Regular updates

Ensuring regular updates are shared on risk registers, your school risk profile and/or risk management information systems by those who are accountable for their management are key. For some independent schools this may mean a more frequent review of some critical issues, for others a less regular review may be adequate. Either way, the results of this update should be communicated to your schools council/governing body and management team.

Horizon scanning – a pre-emptive strike

Make horizon scanning for events and emerging risks (as well as their incoming velocity) a cyclical feature of council/governor and management team time together. Looking out across the sector and wider landscape can help you prepare for the future, allowing time to think through and assess the implications for your school. This pre-emptive approach will help ensure that the risk control framework remains effective to withstand the risks associated with these external events, or at least provide time to agree mitigating actions. In our experience independent schools that undertake regular horizon scanning are often better placed to take advantage of opportunities that arise.

Effective communication channels

Your school should consider having a central process for highlighting instances of actual or potential risk materialisation and control failures or near misses. This will help ensure that this knowledge can be shared across the school and will assist with root cause analysis, instigation of remedial actions and avoid the possibility of repetition.

Review framework

Risk management should be reviewed within your schools from an operational and governance hierarchy point of view eg by management teams, council/governing body meetings and by specific committees or boards with a particular focus ie audit committee. There should be a clear structure for risk escalation through to the accounting officer and council/ governing body as necessary. The audit and risk committee should have a particular interest in ensuring that the risk review and reporting arrangements are sufficiently integrated and effective. Your council/ governing body should undertake an independent review of their schools risk management and assurance arrangements at least annually.

Download the independent schools report to discover the other eight essential areas to consider when implementing risk management.

We hope that you have put in place the arrangements that will bring the risk register to life and add value to the way in which your independent school plans for the future as well as monitors and controls risk.

Governance, risk and compliance

Please do visit our Insight4GRC page where you can find out more about the RSM governance, risk and compliance software.