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I work with organizations in every sector, covering the spectrum from major corporations to very small charitable organizations and everything in between. So it wasn't a surprise to me that the panel recommended many of the same strategies for not-for-profits that corporations use to deal with risk and risk management. Here are a few key ideas for you to consider for your board (no matter of your sector).
The number one idea is to ensure that the board and management actually discuss risk in the organization. It sounds simple, but the panel recognized that it can run the gamut from being innocently ignored (often because it is difficult to do) to being purposely hidden (a very disconcerting problem).
As a Corporate Secretary, here are two ways to ensure risk is being dealt with. First is to ensure that it gets addressed (deeply) during the strategy session. You can't effectively discuss or decide on strategy without thinking about and dealing with the risks inherent on the different paths. In the words of one of the panelists - risk needs to be "baked into strategy". I couldn't agree more.
The second way to get the conversation going is to ensure that it is on the agendas of the key committees for the areas they cover at least once a year and on the board agenda regularly (probably quarterly). The information from management for those items may be an update on a traditional heat map (that shows risks and whether they are green - well handled, yellow - needing to be watched or red - requiring near term action) or a quadrant chart (that plots risks on the dual axes of likelihood and impact).
Another item of note for not-for-profits is the shift from large boards that include everyone who fundraises and assists the organization to smaller boards that oversee operations, like those found in the corporate sector. Often those new smaller boards work together with a second fundraising or advisory board that does not have the traditional oversight responsibilities of a board.
When moving from a large "kitchen sink" board to a small oversight board, not-for-profits are increasingly looking at the skills mix of their board and doing gap analyses to determine who they need. Even in organizations that draw from their membership or are "assigned" directors, simply painting the picture of the ideal candidate and communicating it can help boards find the skills they need to ensure success.
Finally, dealing with "residual risk" - this is risk that is left over after all management and mitigation strategies have been well deployed - is critical. Andrea Robertson, President and CEO of STARS noted that there is a clear acknowledgement that they deal in very risky businesses, including medicine and aviation. One residual risk is that a crash could occur - so the board and management discuss how they will respond not if, but when the residual risk comes to pass.
In that case it is important for a not-for-profit to have a crisis communication plan. When the thinkable or unthinkable happens - who will speak for the organization, how will it be handled, how will stakeholders be informed, who is notified first, what is that first step and the next and the next. Having a pre-determined plan in place ensures that communication is timely and appropriate to inform stakeholders and maintain trust. Good advice for any organization in any sector.
So if you don't have these risk mitigator strategies (aka, mittens) keeping you safe and warm, or they are falling apart or your string is missing, now is the time to knit them back up.
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