Risk management considerations for the boardroom
Thinking ahead, being prepared
[Image: A. Yorio - Unsplash]
I regularly meet with Board members and Executives, mainly in the not-for-profit space to talk about risk management. In the wake of the Royal Commission in to Aged Care Quality and Safety (the Royal Commission) being announced, we saw a flurry of activity from the aged care sector to prepare submissions, to think about the issues that may be raised and the recommendations that may follow. I know that this remains a regular agenda item for many Boards as we monitor the progress of the Royal Commission. But are we thinking about the impact with a risk management lens?
Of course, organisations are asking questions to try to understand the potential gaps between known good practice and their own experience. But what are the right questions to ask in order to be satisfied that things are running well, that the organisation is resilient enough to respond to recommendations or changes in legislation or regulations that govern the sector?
Many Directors will ask about compliance – things like compliance to accreditation standards, compliance to Occupation Health & Safety legislation, compliance to the organisation’s own policies and practices. This is good practice and management should be in a position to provide evidence of compliance and be prepared for discussion on these topics and be open to exploring different ways to report against compliance requirements to assist Directors make informed decisions.
Other Directors might ask about quality frameworks – how do we know that we provide good service, have a good culture, understand our stakeholders, are responsive to changing client and staff needs? All these questions are worthwhile and assist Directors to gain insight into the way the organisation operates and how it is perceived by others. Management should be able to respond by providing such things as satisfaction survey results, a compliments and complaints register, a continuous improvement register.
Still others might focus on questions of organisational sustainability, competition in the market place that may follow the Royal Commission, the impact of negative press should anything specific be uncovered during the Royal Commission and so on.
Here are a few more questions that Directors might think about asking in order to respond to the Royal Commission recommendations and still achieve the organisations strategic objectives:
- Are we clear about what are aiming to achieve?
- What are the things that could stop us from achieving our objectives?
- What are the things we must do now, in the medium and longer term to address the things that could stop us achieving our objectives?
- What are the things we should stop doing now, in the medium and longer term to address the things that could stop us achieving our objectives?
- What the consequences of not acting on what we know could stop us from achieving our objectives?
- How resilient is our organisation to be able to respond to unforeseen events?
In doing so, Directors will be asking questions about risk and how the organisation manages risk that is away from the day to day operational issues that many service centred organisations focus on and in to a more strategic space. These questions are aimed at thinking ahead and being prepared, even if you don’t know what lies ahead.
[Source: Jane Boag, B App Sc (OT), Grad. Dip. Community Health, GAICD, Shared Objectives]