Risk Management

Risk management: in an increasingly uncertain and less stable operating environment, institutions are increasingly mindful of the opportunities and risks. Governing bodies need to ensure the key risks have been identified and are effectively managed.

Overview

Increasing attention is being paid to risk management by governing bodies. This in part reflects cases of ineffective risk management in the private sector, which have resulted in corporate failure. Equally, the action of higher education governing bodies is in response to the increasingly uncertain and less predictable operating environment faced by institutions.

Governors must be mindful of risk, and, in particular, be vigilant as to whether the decisions they are being asked to make bring significant reputational or financial risks. Where they do, governors need to assure themselves that the risks have been fully assessed and effective mitigation strategies adopted to minimise the likelihood of any adverse reputational or financial consequences occurring.

The Scottish Code of Governance (p9) emphasises that 'institutions must adopt a risk-based approach to strategic planning.' In other words when selecting a strategy, institutions need to assess the risks associated with the different strategic options, and take account of the risks when selecting their preferred option.

Additional Resources

Briefing note 8: Risk management

The governing body exercises oversight of the provider’s risk management and seek assurances from the executive that key risks have been identified and are being effectively managed. This requires that risks are identified, their impact and likelihood assessed, and mitigation strategies adopted. To ensure there is a clear understanding of the extent to which risk is tolerated, the governing body should agree its risk appetite.
Download the briefing note

Getting to grips guide

The 'Getting to Grips with Risk' provides a detailed discussion of risk management and governors, the types of risk faced by higher education institutions and a sample risk register.
Download the guide

Find out about other areas of Governor responsibilities

 Governor responsibilities