Risk management simply a 'paper exercise' for too many charities

Finance | 24 Jan 2008

Most charities do not believe their risk management policies are as effective as they should be, according to a new report. PKF and CFDG’s Managing Risk – Protecting your Assets, reveals that the number of charities concerned about embedding risk management is five times higher than those concerned about their financial sustainability.

Only 12 per cent of finance directors claimed to be most worried about the financial sustainability of their organisation, but 59 per cent of interviewees put aspects of embedding risk management top of their list of concerns. Only 28 per cent of respondents described their risk management as ‘embedded and working effectively’. Of those concerned about the effectiveness of their measures, a third believe that risk management is little more than a paper exercise at their charity.

Richard Weighell, head of PKF’s business risk services team and author of the report, said: “Protection does come at a cost and a balance needs to be struck between threats and what can be afforded. However, when risk management doesn’t progress beyond being a paper exercise, any charity’s risk defences are going to be inadequate and they will be vulnerable.”

For a majority of trustees (54 per cent), risk assessment is still only an annual process, while 7 per cent reported that their trustees didn’t even review risk annually.

Directory: Charity Finance Directors' Group (CFDG) | PKF (UK) LLP
Who's Who: Richard Weighell

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