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Decision Making Risk and Control

Principle

The board makes sure that its decision-making processes are informed, rigorous and timely, and that effective delegation, control and risk-assessment, and management systems are set up and monitored.

 

Rationale

The board is legally responsible for the decisions and actions of the union but it cannot and should not do everything. The board may be required by statute or the union’s governing document to make certain decisions but it needs to decide which other matters it will make decisions about and which it can and will delegate.

 

Trustees delegate authority but not legal responsibility, so the board needs to have suitable financial and related controls and reporting arrangements to make sure it oversees these delegated matters. Trustees must also identify and assess risks and opportunities for the organisation and decide how best to deal with them, including assessing whether they are manageable or worth taking.

 

Key outcomes

  • 4.1 The board is clear that its focus is on strategy, performance, assurance, governance and infrastructure rather than operational matters and reflects this in its governing documents and in what it delegates.
  • 4.2The board has a sound decision-making and monitoring framework which helps the organisation deliver its charitable purposes. It is aware of the range of financial and non-financial risks it needs to monitor and manage.
  • 4.3 The board promotes a culture of sound management of resources but also understands that being over-cautious and risk averse can itself be a risk and hinder innovation.
  • 4.4 Where aspects of the union’s role are delegated to committees, staff, volunteers or contractors, the board keeps responsibility and oversight.
  • 4.5 Where aspects of the union’s role are constitutionally given to democratic decision-making bodies or stakeholders, the board communicates with and supports those bodies/stakeholders.

Recommended practice

 

Delegation and control

  • 4.6.1 The board regularly reviews which matters are carried out by the board, which are for elected/democratic bodies and which can be delegated. It delegates to senior managers, committees or individual trustees, staff or volunteers.
  • 4.6.2 The board describes this framework in a document which provides enough detail and clear boundaries for the delegations to be understood and carried out. Systems are in place to monitor and oversee how delegations and democratic processes are carried out. Trustees understand this framework.
  • 4.6.3 The board makes sure that its committees have suitable terms of reference and membership and that:

 

  • the terms of reference are reviewed regularly
  • the committee membership is refreshed regularly and does not rely too much on particular people.

 

  • 4.6.4 Where a union uses third-party suppliers or services – for example for fundraising, data management, consultancy or other purposes – the board makes sure that this work is carried out in the interests of the union and in line with its values and the agreement between the union and supplier. The board makes sure that such agreements are regularly reviewed so that they remain appropriate.
  • 4.6.5 The board regularly reviews the union’s key policies and procedures to ensure that they still support, and are adequate for, delivering the union’s aims. This includes:

 

  • policies and procedures dealing with board strategies
  • functions and responsibilities
  • finances (including reserves)
  • service or quality standards
  • good employment practices
  • encouraging and using volunteers,
  • data protection
  • managing the relationship with the university/college

 

4.7 Managing and monitoring organisational performance

 

  • 4.7.1 Working with senior management, the board ensures that operational plans and budgets are in line with the union’s purposes, agreed strategic aims and available resources.
  • 4.7.2 The board regularly monitors performance using a consistent framework and checks performance against the union’s strategic aims, operational plans and budgets. It has structures that hold staff to account and support them in meeting these goals.
  • 4.7.3 The board agrees with senior management what information is needed to assess delivery against agreed plans, outcomes and timescales. Information should be timely, relevant, accurate and in an easy to understand format.
  • 4.7.4 The board regularly considers information from other similar organisations to compare or benchmark the organisation’s performance.

 

4.8 Actively managing risks

 

  • 4.8.1 The board has overall responsibility for risk management and discusses and decides the level of risk it is prepared to accept for specific and combined risks.
  • 4.8.2 The board regularly reviews the union’s specific significant risks and the effect of all these risks together. It makes plans to mitigate and manage these risks appropriately.
  • 4.8.3 The board puts in place and regularly reviews the union’s process for identifying, prioritising, escalating and managing risks and, where applicable, the union’s system of internal controls to manage these risks. The board reviews the effectiveness of the union’s approach to risk at least every year, which includes an assessment about whether the union’s approach to risk supports innovation.
  • 4.8.4 The board describes the union’s approach to risk in its annual report and in line with regulatory requirements.

 

4.9 Appointing auditors and audits

 

  • 4.9.1 The board agrees and oversees an effective process for appointing and reviewing auditors, taking advice from an audit committee if one exists.
  • 4.9.2 Where the union has an audit committee, its chair has recent and relevant financial experience and the committee includes at least two trustees.
  • 4.9.3 The board, or audit committee, has the opportunity to meet the auditors without paid staff at least once a year.
  • 4.9.4Arrangements are in place for a body, such as the audit committee, to consider concerns raised in confidence about alleged improprieties, misconduct or wrongdoing. This includes concerns raised by ‘whistle blowing’. Arrangements are also in place for appropriate and independent investigation and follow-up action.

 

Here’s some resources from NUS, SUs or sector partners below to support your development in this area.

Please contact help.qsu@nus.org.uk if you’d like help to find something specific.

 

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