Risk management – 'we did risk last year'

As a chair of governors, I know that when negative events happen unexpectedly; this has lasting effects on the school environment. The immediate blow felt from the event itself is bad enough, but the time, energy and resources taken in dealing with the aftermath and getting back to business as usual are considerable and very disruptive. On a positive note these events can also become a catalyst for change, but let’s be honest, change is always better when it is planned.

Equally I know that often insufficient time, energy and resources are invested in exploring opportunities and the future of the school, academy or trust. There is often just too much effort required in keeping the business as usual steady; after all, the school environment is challenging and demanding with a large number of interested stakeholders, all eagerly watching and with a view as to how things should be done. Since my initial involvement with grant maintained schools some 20 years ago I have watched the risk profile in education shift significantly. There is now a greater breadth of risks and the implications reach very deeply if these risks are not properly managed.

Of course we know stuff will always happen. We cannot manage every eventuality, however the more we can anticipate and manage the better. The academy sector is still maturing but one thing that can be learnt from other arenas, including the commercial world, is that there is a need to ensure that those responsible for directing and managing academies stay on top of emerging risks, checking that the management of risk is robust and effective and that arrangements are kept under review.

During recent discussions with the Education Funding Agency it became clear that there are concerns that academies are struggling with the concept of risk management. Their concerns reflected a need to ensure that business risk management became a key agenda item for trustees, helping shape direction, plans and decisions. Their fear was that risk management was not business focused and had been relegated to more physical risks akin to slips, trips and falls. They were also concerned that the mere presence of a risk register was in itself sufficient for a trust to say 'we do risk management', or as someone said to me recently 'we did risk management last year'.  

At RSM’s summer academy events we launched our academy board assurance toolkit. We took the opportunity to canvass attendees in connection with their views on risks that the sector is facing. To obtain this we asked four simple and emotive questions:

1. what is the worst thing that could happen today / tomorrow at their academy?
2 what is the greatest fear for their academy in the next 12 months?
3. what is the greatest challenge that their academy faces in the next 12 – 24 months?
4. what is the greatest opportunity that the academy has in the next 12 – 36 months?

Download the summary of responses. 

So even if your Academy did do risk last year, it is clear that it is worth doing again (and again). 

The risk information above provides some useful insight into the risks at the forefront of minds as well as some that are emerging in the sector. At RSM we believe that these risks will continue to morph and form, however this provides a useful opportunity for all academies to undertake the following:

  • reflect on their own academy’s exposure to these risks; and
  • ensure that, where they are relevant, these risks are being effectively managed (review controls and assurance arrangements in place, as well as progress of actions).

We would go as far as to say that many of these risks should be forming part of the academy board assurance framework. After all, trustees will want to be confident that they are not over exposed and that scarce resources will not be diverted tackling unexpected events through what could be management control failure or failure to plan a head to maximise on opportunities.

Click here for our academy board assurance toolkit. 

If you would like further information, please get in touch with Matthew Humphrey or your usual RSM contact.