Integrated Approach to Understanding and Managing Risk for Board Members

1. Integrated Approach to Understanding and Managing Risk for Board Members AOHC Conference 2009 Presented by: Axelle Janczur

2. Agenda • General overview of some themes and issues in risk management thinking for non-profits • Risk management framework • Integrated strategies

3. Risk Management • Discipline for dealing with uncertainty • Helps identify, assess and control risks – to the extent that they are controllable • Operations • Service delivery • Staffing • Governance activities • External environment

4. What is risk? Risk is unavoidable and present in virtually every human situations. “chance of something happening that will have an impact on objectives. It is measured in terms of consequences and likelihood”

5. Why risk management? • Acknowledge that external environment is not stable, risk is increasing • Create a sense of confidence and safety about your organization • Allows you to answer the question – are you fulfilling your mission?

6. RM in the Non Profit Sector • Fundamentally different from for profit world • Mission based – we help people (i.e. do no harm) • RM activities and programs focus principally on preventing harm to persons served by the non profit • Thus, has to be aligned with our mission

7. RM in the Non Profit Sector In its fullest sense, risk management is nothing less than the way we do business

8. ERM - A comprehensive and integrated framework for managing risk • Corporate Governance • Line management • Portfolio management • Risk transfer • Risk analytics • Data and technology resources • Stakeholder management

9. Risk Concepts • Exposure – what do we stand to lost • Volatitlity – how uncertain is the future • Probability – how likely is it • Severity – how bad might it get • Time Horizon – how long will we be exposed

10. Risk Concepts (Cont’d) • Correlation – How are riskd related to each other • Capital – How much should we set aside to cover unexepected losses

11. Risk Processes • Risk awareness • Risk measurement • Risk Control

12. 3 Basic Strategies • Prevention • Mitigation • Coping

13. RM Framework In NPO’s, focus is on risks related to: • Operations • Service delivery • Staffing • Governance activities • External environment

14. Focused RM strategies • Operations • Physical space – is it appropriate and welcoming, do clients feel safe? • OHS – are there security measures in place (panic buttons, codes, etc) • Capital assets – inventory regularly, replace as required (build in fund)

15. Focused RM strategies Service Delivery • Service philosophy clearly articulated (e.g. harm reduction approach, family planning, consumer involvement, etc.) • Partnership agreements • Criminal checks for staff and volunteers • Planning and evaluation focused on indicators of vulnerability

16. Focused RM strategies High Risk Service situations • Policies • Informed consent • Involuntary assessment/consent and capacity • Terminating client relationships • Duty to warn; duty to report • Dealing with disruptive, disrespectful and dangerous behaviour • Client privacy and confidentiality (documentation guidelines)

17. Focused RM strategies Staffing • Police reference checks (p) • Anti-racism, anti-discrimination, anti-harassment complaints processes (c) • Focus on professional development (p/m) • Security protocols • Case management, conferencing, self-care, professional development

18. Focused RM Strategies Governance – Boards focus on general oversight and stewardship, maintain an integrated and objective perspective • Codes of conduct • Typically voluntary • Outline minimum specifications

19. Focused RM strategies Governance • Best Practices • Stakeholder communication • Board independence • Board performance assessment • Executive and board compensation Linking Corporate Governance and ERM

20. Focused RM strategies Governance • Mission, vision, values have to be very clear • Commitment to strategic planning • Evaluation frameworks • Reporting calendar clearly outlining trusteeship issues • Performance management framework for ED • Executive limitations policy • Management structure

21. Focused RM strategies External Environment • Pandemic plan – e.g. stockpile supplies, program closure protocols, telephone trees, etc. • Contingency reserves (funding disruptions, unfunded expenditures) • Communications plan

22. Risk of client harm Your mission is to help people – not hurt them. Causing harm to a client, however unintentional, undermines your purpose and jeopardizes your mission.

23. Conclusion Risk is a complex issue We need to ensure our organizations are well prepared to manage risk Strategies need to be embedded in all aspects of how we do business

24. Contact information Axelle Janczur www.accessalliance.ca ajanczur@accessalliance.ca