Tim Brangwyn: Why international aid charities need to improve how they manage risk

15 Jun 2018 Expert insight

Tim Brangwyn, managing director at third sector specialist insurer Millstream Underwriting, poses key questions that trustees should ask to help develop more targeted, dynamic and efficient risk management in a changing world. 

Sadly, there are many examples that illustrate how the welfare of individual aid workers can be at risk when operating abroad. And the risks charities face are always evolving. For instance, kidnap and ransom crises as well as terrorist attacks - such as January’s deplorable attack on Save the Children offices in Jalalabad - are increasing, according to international security company Constellis.

In 2017, it said 25 countries were considered high or very high risk for kidnapping, including non-conflict countries and sizable economies with effective governmental frameworks, a trend which Constellis said indicated that kidnapping has morphed into a worldwide phenomenon.

The risk of kidnap and ransom sits alongside "normal" risks of natural disasters, epidemics and pandemics, such as the recent and ongoing re-emergence of ebola outbreaks. And while the largest charities often benefit from, and are able to afford, dedicated risk management resources, many others are having to stretch to make the most of their resources, which can leave gaps in the support that they give.

Do trustees and employees appreciate the risks on the ground?

Robust risk management is not optional of course: the Charity Commission requires boards of trustees to make an annual statement confirming that the major risks to which the charity is exposed have been reviewed, and systems or procedures have been established to manage those risks. Organisational resilience (such as IT), environmental concerns and corporate governance are often, rightly, areas of focus. Has equal consideration been given to the risks people face in the field?

Funding and financial pressures consistently rank as one of the major concerns expressed by charities, along with reputational damage. Charities often find themselves working to tight and conflicting budgetary constraints - on the one hand demanding value for service on many fronts, but on the other a ready willingness to go beyond the call of duty to provide that service. 

The delivery of service is therefore a managed risk and the quality of that delivery will be impacted by the extent that management is effective. A key question is, do the trustees have a sufficient appreciation of the risks "on the ground", and how the organisation is managing them? 

At the same time, employees and volunteers are often not vocal in demand of their needs, and may even be unaware of the risks they face. Recognising this, risk management should always take an holistic view, contemplating the full range of risks that may be faced, and focus training and supervision towards support, direct and indirect.

Is training and selection well targeted?

For instance, well-focused selection for different projects, and targeted training will, in the long run, pay dividends. Has the organisation selected people that are capable of handling the challenge? Have they been adequately briefed and trained on the local cultures and norms, how to behave, what to look out for etc?

And do they have adequate support if things go wrong? Can the organisation quickly implement processes for situation updates and clear lines of communication in the field, emergency assistance strategy and provision of security and medical support if needed?

Responding to emergencies quickly and efficiently is not only vital for aid workers, but also for the overall reputation of an organisation. More than ever culture, values, transparency and effective leadership in a crisis are under the microscope, particularly following the Oxfam crisis earlier this year.

Codes of conduct for business practices, ethics, and behaviours are ultimately management responsibilities. And it is now rarely the case that charities are considered as an exception, immune from scrutiny and negative publicity. At the same time, charities seem to suffer disproportionately from damaged reputation.

What is and isn’t covered?

Publicity in a crisis can catch charities off-guard, and at a particularly sensitive and challenging time when resources may be diverted to finding a resolution to the unfolding events. An event is difficult enough to deal with in its own, but if badly handled the negative PR may impact recruitment/volunteering, finance/fundraising let alone the risks of liability for alleged or actual mismanagement.

Do trustees understand the insurance covers available and the risks that they do and do not protect against? Comprehensive cover should address the liability and reputational risks that charities and their employees face, including emergency assistance (repatriation, medical expenses etc), crisis management and public relations cost to manage surges in publicity. 

Covers such as personal accident, travel, kidnap and ransom should all be given the same consideration as trustees, employers and other liability insurances. 

Specialist insurance companies also offer charities pragmatic assessments to help support and improve their existing risk management policies and procedures. 

Being aware, being prepared, and selecting the right partners will encourage better decision making and responses in the event of the worst happening. Proactive risk management, risk planning and training are essential, as is having the best backup and support in place that allow resources to be allocated rapidly and effectively in a crisis. 

Civil Society Media is hosting its NGO Summit on 27 Novermber 2018. To book onto the event, click here. 

 

 

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