Policy, Planning and Governance
Risk Management
Introduction
Risk Management at Stirling
All University activities have some uncertainty of outcome, which may lead to opportunities for even greater benefits than had been planned, or which may threaten the success of a venture, and lead to additional problems for a department or institution.
This uncertainty of outcome is risk, and has to be assessed in terms of how likely it is that something will happen, whether positive or negative, and what the impact of the occurrence will be. Any activity will have opportunities and threats, and the role of risk management is to identify and assess these risks, and then responding to them.
Ideally, risk management should be a means of controlling the threats, by reducing their likelihood, impact or both, while allowing the opportunity to be seized. In some cases the threats will outweigh the potential benefits to such an extent that it is decided that the risk should be avoided in total, but this also means that the opportunity is lost.
Other means of responding to risk (often known as ‘controls’) include:
Tolerating the risk (for example, if the impact and likelihood are within acceptable limits)
- Transferring the risk (insurance is a common example of this, but transferring some aspects of the risk to a partner is also an example)
- “Treating” the risk – that is, developing counter-measures to the risk.
Risks have to be assessed and managed in context – risks for similar activities in different departments may have different impacts or likelihood, and require different control measures.
When properly used, risk management can bring a wide range of benefits to an organisation, as it is a two-way process, feeding information up through all levels of the institution, and allowing support to be directed to where it is most needed:
Benefits of Risk Management
The University becomes aware of significant risks, and is able to plan the use of resources more efficiently because of priority ranking of risks:
- The University can actively encourage risk taking because the exposure to risk is better understood and agreed as acceptable
- The University and its departments have fewer shocks and unwelcome surprises
- The internal audit programme can be more focussed
- New opportunities can be identified, taken more quickly and are more likely to be successful
- University and departmental objectives are more likely to be achieved
- Continual improvement
- Funders and other interested parties can be reassured, and this may lead to lighter-touch regulation
- Responsibility and accountability can be recognised, without developing a culture of blame
- Exposure to a possible loss or bad reputation is reduced
- Strategic and business planning is improved, by appraising and challenging current practices and objectives, and developing a culture of healthy self-criticism
- Academic and other staff have a clear means within which to construct a valid case for new initiatives, in a way which will be understood across departments and areas.
At Stirling the main risks facing the University in terms of planning and meeting its objectives (its strategic risks) are managed centrally by the senior management team. Other risks, at Academic or Service Department or project level, are managed within their level, but can be reported upwards if necessary. Guidance and support is available from the Risk Manager, Claire MacLean, for anyone who would like help in identifying, assessing and managing their risks.
