Breadcrumbs
BUSINESS RISK MANAGEMENT UPDATE (AP01/51)
FOR DECISION
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Relevance to Strategy and Corporate Plan:
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Staff and financial implications:
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Main issues to concern the Board:
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Introduction
1. In June 2001, the Board considered a paper on Business Risk. This outlined the need for effective Corporate Governance in line with Turnbull Recommendations and confirmed that we have three of the four major requirements in place.2. The outstanding area was corporate business risk management where we were a little weaker in process terms. The missing element was the need for Board level input to the identification and management of business risks.
3. The Board agreed to hold a seminar in September to discuss business risk with the benefit of a draft version of the roll forwarded corporate plan. The Audit and Risk Management Committee met immediately after the seminar and endorsed the main risks identified. The Executive was asked to produce a draft action plan for sign off by the Board.
Output from seminar
4. The seminar comprised members of the Board, Executive and staff members. The seminar started with a short presentation about risk management by the Head of Internal Audit and Principal Finance Officer. A brainstorm session identified a number of risks which were then discussed, clarified and prioritised. We concluded that 13 key risks should be listed, that each should be ranked in terms of probability and impact and that an action plan should be produced.
5. The seminar agreed that the process of risk definition and management should be ongoing and should take place on an annual basis.
6. It was agreed that Corporate Planning should own corporate risk on behalf of the Executive and that Internal Audit complete a first draft of the action plan, consulting with colleagues to ensure buy in and any further issues in the process. The main suggestion arising from internal consultation was that legal challenge warranted a higher risk than previously assigned. This was agreed.
Risk management
7. The key risks are shown in Annex 1 along with an indication of the action being taken and the responsibility for managing that risk.
8. Risks are assessed in terms of probability and impact and ranked accordingly. Management review has then determined the action to be taken. In general, risks can be transferred, removed, accepted or mitigated. The proposal is that all internal risks have management actions and responsibilities put in place to manage and mitigate that risk.
Next steps
9. It is necessary to have ownership of the process as well as the risks themselves. It is agreed that Corporate Planing will take on responsibility for the process of Business Risk identification and management in the Agency.
Recommendations
10. To adopt formally the 2002 Risk Management Action plan (Annex 1 ) which resulted from the Board risk management seminar held in September and which was endorsed by the Audit and Risk Management Committee.
11. To review strategic risks on an annual basis and agree a risk management action plan for each calendar year (taking account of the annual roll forward of the corporate plan) and requiring an annual board seminar in the summer.
File ref 15907
Annex 1
Countryside Agency 2002 Risk Management Action Plan
Risk | Prob | Impact | Action | Resp |
Lack of credibility and failure to define a unique selling point | High | High | Mitigate - through corporate positioning strategy and Board / Exec activity with key partners. Communications requirements identified by all PMs. | Board & Exec PMs |
Outputs don't deliver outcomes. | High | Med | Mitigate - programme business plans match all outputs to defined outcomes. Directors monitoring. Achievement of outputs reported in quarterly review process. | PMs Dirs SS |
Unrealistic planning. | High | Med | Mitigate programme business plans are subject to quality assurance checks by Corporate Planning. Programme Business Plans are subject to quality assurance checks. | SS Dirs / CP |
Ill defined outcomes. | High | Low | Mitigate - Responsibility for named outcomes is accepted by individual members of the Executive Team. | Exec |
Inability to deliver outputs. | Med | Med | Mitigate - achievement of outputs reported quarterly through Corporate Planning process. | Exec PMs |
Lack of staff skills. | Med | Med | Mitigate - staff skills audit undertaken, improvement built into all training plans. | DC PMs |
Legal challenge. | Med | Med | Mitigate - take legal advice, act upon the advice, understand the risks involved, involve Board & Exec. | PMs |
Lack of product development. | Med | Low | Mitigate - new initiatives, lottery strategy, engage with Govt. | Board & Exec |
Loss of key staff. | Low | High | Mitigate - good HR policies and practices, staff retention and replacement policy in place. | DC |
Major fraud. | Low | High | Mitigate - procedures, audit and staff awareness campaign. | JT |
Lower overall priority for countryside matters. | Low | High | Mitigate - the Agency needs to help keep countryside issues in the news. | Board & Exec |
Loss of infrastructure. | Low | Med | Mitigate - disaster recovery plan to be agreed and reviewed regularly. | JT |
External economic and political factors. | Low | Low | Accepted. | Exec |
Annex 2
Further Analyses of Risk elements
Risk | Considerations |
Lack of credibility and failure to define a unique selling point | The Agency's position rests on its ability to promote a wide range of Countryside related outcomes. There is a risk that its expertise could be seen to be diluted and that a clear identity will not be promoted. |
Outputs don't deliver outcomes. | We may be unable to show that the identified outputs we are delivering are actually resulting in the sort of outcomes we seek within the Countryside. |
Unrealistic planning. | Our corporate planning and individual business planning process may be insufficiently robust to identify and remove unrealistic, conflicting or uncertain targets. |
Ill defined outcomes. | Our outputs may not be sufficiently well defined to show how they have contributed to achievement of our planned outcomes. |
Inability to deliver outputs. | We may not be able to deliver all our outputs because of lack of resources, conflicting priorities or unforeseen problems. |
Lack of staff skills. | We may not have, or be able to acquire and retain, staff with the skills needed to carry out our wide range of responsibilities. Conversely we may have staff with skills we don't know about. |
Legal challenge. | We are starting to develop processes where we are promoting the restriction or enhancement of the rights of others. This risks the possibility of legal challenge against ourselves. |
Lack of product development. | There is a risk that whilst concentrating on deliver of all current initiatives we do not invest sufficient time in developing new proposals with their necessary lead in times. |
Loss of key staff. | Our staff are our key asset and the risk of losing key staff, in senior positions at critical stages would impact on our ability to deliver. |
Major fraud. | The political impact of a major fraudulent activity, perhaps related to a high profile grant |
Lower overall priority for countryside matters. | The risk that overall countryside issues will have a lower profile, perhaps because of urban or international developments |
Loss of infrastructure. | The Agency could be constrained if it lost key elements of its infrastructure such as library, offices or IT services. |
External economic and political factors. | External factors such as governmental change, FMD, economic, social and technical change. |
