Reviewing corporate governance to maximise effective decision-making
Being able to effectively manage risks and have robust corporate governance structures are more important than ever in the decision-making process, says HWB’s charity specialist Michaela Johns.
With the sector evolving at a fast rate, Michaela says charities need to ensure any risks they take are calculated and controlled – and ultimately lead to achieving the end goal. It comes as The Institute of Risk Management has published new guidance “Risk Governance for Charities: Risk management structures and accountabilities”, which examines in detail how charities can implement governance structures to help make effective risk management decisions.
It considers roles and responsibilities for managing risk and sets out risk governance options for small, medium and large charities. At the core of the guidance are some key principles of good risk management practice, including:
- The entire organisation plays a role in risk management resulting in risk being managed at all levels of the organisation.
- Risk management is transparent with assurances built into processes.
- Leaders make informed decisions and take timely action.
- Risk taking is calculated, controlled and monitored.
- The probability of success is increased and with the organisation more likely to achieve its aims.
Michaela says: “The report contains some very useful best practice advice that charity trustees and senior management may wish to familiarise themselves with.
“The regulator’s focus on accountability and robust corporate governance shows no sign of abating, so all charities, however large or small, need to have it at the top of their priorities.”
Michaela adds: “Now may be a pertinent time for charities to review their audit committee terms of reference (TOR) and remuneration committee TOR. Terms of reference should be drafted and agreed by the board and they will then be used to direct future meetings, ensuring they are as productive and useful as possible.
“This can only assist in the efficient running of the meeting and keeping people focused on the task at hand.”
If you would like assistance with this or would like our charity specialists to review your corporate governance, please contact Michaela Johns on 023 8046 1256.