Fundamentals of Risk Management

Risk strategy
266
FIgURE 
22.2
Risk architecture for a charity
Trustee board
• Overall responsibility for risk
management
Governance and risk committee
• Provide assurance to the board that risks to achieving excellence in governance are
being effectively understood, managed and mitigated
• Identify significant risks that the board needs to consider in detail
• Identify that the risk management strategy and policy is implemented consistently
across the charity
• Monitor and ensure the effectiveness of risk management governance systems
• Ensure that the risk register is fit for purpose and meets requirements sufficient
for the board to discharge statutory functions
Executive committee
Fundraising committee 
Events committee 
Finance committee 
Audit committee
• Establish internal audit plan
• Receive reports from committees
• Review annual report to Charity
Commission 
Inform and monitor actions
Reports on RM activities 

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Risk management responsibilities
267
management committee will send reports to the audit committee, and that will be 
the opportunity for non-executive directors to evaluate risk performance and obtain 
risk assurance.
For organizations that are not operating in such a high-risk environment, it may 
not be necessary for the risk committee to be a direct report to the main board.
In these circumstances, the risk committee may be a sub-committee of the executive 
committee or the operations committee. In all cases, the corporate structure for the 
management of risk should be proportionate to the level of risk within the organization 
and the size, complexity, nature and risk exposure of the organization.
However, there are no specified correct structures for the risk architecture of an 
organization. Provided that the risk committee delivers the required outputs, the 
membership and terms of reference will be for the organization to decide. Nevertheless, 
the general point remains that management of risk is an executive function, whereas 
audit activities should be led by non-executive directors.