KEY RISKS AND UNCERTAINTIES
Contents - Annual Report
No organisation can operate in a risk-free environment. Our vision of a just world, free from poverty, requires us to take risks as we operate in inherently vulnerable and hostile environments which present us with some difficult communication, security, logistical and financial challenges. Also, we need to take some risks in order to take advantage of new opportunities.
We consider all types of risk, both internal (for instance, financial, operational, reputational, governance and compliance) and external (such as political, environmental, social, technical, legal and economic) when planning for the future. Many external risks are outside our direct control, so our aim is always to mitigate the potential impact of risks arising.
We take risk management very seriously and have a clear framework in place alongside a suite of clear policies. With increased regulation, uncertainty due to Brexit, and the high expectations of our stakeholders, we know that we need to proactively anticipate risks and have effective and consistent mitigations in place.
Risk framework and controls
Our operations depend on the effective management of risk while ensuring our organisational objectives are achieved.
We have an embedded risk framework that works both “bottom-up” and “top-down”. Throughout the year we hold risk workshops with Trustees, Executive Directors and with representatives from each Directorate. These capture concerns and identify mitigating actions or controls to risk that are highlighted.
In addition, our wider assurance framework includes our incident reporting, counter fraud, bribery and corruption, management of complaints and grievances, safeguarding and reporting concerns (whistleblowing policies). Having these policies in place help identify risks as they are raised and set out compliance with regulatory responsibilities.
Our risk management principles
The key principles to support the delivery of our risk management approach are:
All staff are responsible for understanding and complying with Comic Relief policies that are in place to mitigate risk to the organisation.
Risk management awareness and training is provided to all staff, appropriate to their role and responsibility.
Risk management is not a stand-alone activity that is separate from Comic Relief’s main activities, it is embedded in key processes and decision-making points (e.g. business planning).
The approach to identifying and managing risks, including the use of common terminology, shall be consistently applied across the organisation.
There is a defined risk management governance structure in place with clear accountabilities that supports the direction and control of risk management across the organisation.
Directorates and teams are responsible for identifying, assessing, managing, and reporting their risks within their risk register and to the Risk Group.
Comic Relief templates have been designed to capture and mitigate risks as they are identified.
Reporting and escalation of risk information should be as fully detailed as is possible at the time, timely and seek to cover all key risks to support management decision-making at relevant levels. Risk reporting and escalation does not transfer risk ownership.
ROLES AND RESPONSIBILITIES
Our Board of Trustees is responsible for ensuring that Comic Relief has robust and effective risk management processes and assurance functions in place. The Board assesses and agrees on the strategic risks and receives updates on how these risks are being mitigated, as well as reviewing any new significant risks at board meetings throughout the year. Committees of the Board provide regular in-year oversight of risk, including operational risks. The Executive Leadership Team reviews the corporate risks as part of wider strategic performance monitoring, taking collective responsibility for ensuring that risks are swiftly identified and effectively mitigated.
The Assurance Team’s remit includes; overseeing the risk management process, advising on risk including previously unknown risks, and being accountable for the Internal Audit function who evaluate the effectiveness of our internal control environment. We also have a Risk Group which brings together representatives from across the organisation with responsibility for risk management. The group shares best practice to ensure we have a consistent and joined-up approach.
Key risks and uncertainties faced by Comic Relief and mitigating actions
We proactively put measures in place to prevent fraud, corruption (including bribery), mismanagement or misconduct in relation to our staff, suppliers or partners, and we will investigate any allegations that we receive through our formal process for reporting concerns or other informal channels.
Description of the risk
What we are doing about it
Threats to Income
The shifting trends in how the public consume entertainment means a decline in linear TV viewing – the main platform on which we have historically communicated – and an increase in online activity, such as on-demand, non- scheduled TV, social media and YouTube. This brings with it a shift in public engagement and public income channels – presenting both opportunities and threats.
The uncertainties posed by Brexit present a range of risks to income and potential for increased UK need.
Ensuring Comic Relief provides a sustainable organisation that delivers our charitable purpose.
Ensuring the Comic Relief business model supports financial stability for the long term.
Our Trustees and staff are constantly reviewing our communication and engagement strategy to ensure that we respond to changes in the media environment. By putting digital at the heart of everything we do – and making sure we are always innovating - our creative teams work to constantly reimagine our fundraising campaigns. This helps the brand stay relevant and exciting to our supporters, and we achieve cut through in an increasingly competitive marketplace. We also work closely with the BBC to evolve different approaches to TV shows and other content, including digital. And we constantly review payment technologies, working with our partners to trial them as they become available.
We are closely monitoring the Brexit situation especially our day to day operations, contracts and supplies. The current uncertainty means we are paying special attention to our judgements and estimates.
Our investment portfolio is continually monitored and kept under review. We continue to monitor the external economic landscape and look for ways to protect and optimise our different income streams. We take independent investment advice and all decisions are overseen by Committee.
We have a Strategy in place and continue to review how Comic Relief is run, aiming to continue to develop the organisation to maximise its efficiency and effectiveness.
Organisational resilience and reputational damage
The charity sector has witnessed a decline of public trust in charities and a decline in support for overseas development. We are not complacent about our reputation and the level of trust it has, but it must ensure that it continues to deliver for the public and other stakeholders.
Transparency and accountability are central to all our external interactions, and we pay close attention to sector guidance and regulatory developments. We welcome questions, challenge, and scrutiny. We are investing in telling the story of the progress being made as a result of our funding and investments to demonstrate positive impacts and the need to keep on giving.
We take a proactive approach to reputation management and our Business Continuity Plan will be there if needed.
So we can be confident in our own activities and their impact, we have good oversight of our UK and international funding though our processes and Committees. We continually monitor our grants so we can identify any potentially critical issues related to the projects we fund.
Protecting Comic Relief as much as possible from misappropriation or misuse of the money donated to Comic Relief, directly or by partners who receive grants.
Our most significant area of fraud risk is in our funded grants and we recognise that we fund work in some of the world’s most challenging environments. To combat this, we conduct due diligence on all funding applications to ensure that organisations have proper controls, oversight and staff skills to manage funds. We then monitor these grants throughout the life of the funding award in the form of six monthly and annual reporting, visits and proactive random checks. All our staff are given specific fraud awareness training. If problems do arise, we have a dedicated Counter Fraud Team to manage investigations and mitigate loss.
To facilitate easy reporting of concerns we have both internal and external Reporting Concerns processes which allow for anonymous reports where necessary.
In 2018/19 we opened eleven new cases of possible fraud within organisations receiving our funding and had fourteen cases carried over from previous years. Nine of the new cases and nine of the cases carried over, were closed in 2018/19. Seven cases were therefore open at 31st July 2019, with investigation and recovery activities ongoing in relation to £1,086,452 of spend. This represents 1.03% of all grants by numbers of grants under management and 0.41% by value of grants under management at 31 July 2019. In relation to these seven open cases, £82,800 has already been recovered and recovery efforts on the remaining funds are ongoing.
Regular penetration and performance testing of our internal Payment Service Layer donations platform ensures a high level of confidence in our ability to transact donations in a secure and seamless fashion.
We are continually strengthening our internal control framework, and our internal audit function tests these controls and reports to management and the Board. Any recommendations for improvements are implemented in a timely manner.
Ensuring there is robust oversight and governance of the organisation is imperative to allow it to deliver its purpose and achieve success and sustainability.
The transition of a new CEO and a change in Trustee compilation at Board will require robust governance to ensure stability such that the organisation continues to function effectively.
Our people are our greatest asset; if we fail to attract, engage, and retain the best staff, it reduces our ability to deliver successful outcomes.
Oversight is provided through mechanics such as Board, Committees and The Executive Leadership Team, and we have dedicated Trustees for key functions of the organisation
A Governance review was recently undertaken to agree better ways of working between Founders, Committees, and Trustees. We have policies and an organisational structure in place to ensure strong governance and clear roles and responsibilities for Trustees, management and staff. This should ensure robust succession planning in key Senior Management and Trustee positions.
We continue to invest in our people.
We provide learning and development opportunities, benchmark our benefits, and engage with staff through regular all staff meetings and surveys.
We provide staff with a means of reporting on inappropriate behaviour or misconduct through a third party.
The wellbeing of our staff is important to enable them to continue doing their job successfully. We have also signed up to the Time to Change pledge, and we have Mental Health First Aiders in place.
Our values, as an organisation, must be consistent and lead how we portray the partners we work with. We must ensure that we represent our partners in a positive and fair light whilst understanding the impact of our decisions about how we portray people and that we mitigate them pro-actively.
As an organisation, we are still on a journey to understand how best to portray our partners and their work. We encourage feedback from our supporters, fundraisers, and the public to help us keep on track and to enable us to show our work in the best light.
Comic Relief has a duty of care to the people we work with – including staff, supporters, and beneficiaries of our grant making activity.
We have a dedicated Safeguarding function within the Assurance Team, to ensure that the safety of our beneficiaries, staff, and others connected with our work is at the heart of everything we do. Our comprehensive safeguarding framework, approved at Board level and independently reviewed by an expert, sets outs measures to prevent harm, abuse, and exploitation across all aspects of our operations – from our grant-making to our visual story-telling and our fundraising.
We work closely with our Partners to strengthen safeguarding within their operations as well as convening other funders to build greater collaboration to strengthen safeguarding across the sector. We quickly investigate any reported incidents by examining the circumstances and taking the necessary proportionate and appropriate action to ensure the safety of our beneficiaries, staff, and others connected with our work. We undertake safeguarding training across the charity so that all staff, contractors, and Trustees understand what safeguarding is, the safeguarding framework we have put in place and how to report any concerns. Also, all staff, contractors and Trustees sign a Safeguarding Code of Conduct which sets out the standards and behaviours we expect.