EUKN - United Kingdom - Managing Risk for Smaller Housing Associations

Managing Risk for Smaller Housing Associations – Good practice guidance

Introduction

Risk management is central to the effective running of an organisation, and best practice risk management is simply good management.

Description

Smaller organisations generally have less managerial time and other resources to devote to formal risk management. This requires careful assessment of the elements that are absolutely essential for good practice and to comply with regulations, and those that fall more into the ‘nice to have’ category.

As explained in the Risk identification and assessment chapter, small organisations have particular vulnerabilities and need a tailored approach. With limited resource it is important to use that resource cost effectively. This quite simply means focusing on the areas of highest risk.

Background information

Smaller associations have limited resources and may not be able to implement ideal levels of control. The situation needs open recognition and to be dealt with transparently in order to manage the increased level of risk, particularly with regard to possible weakness in segregating duties.

It is also sensible for the board to review arrangements periodically. When resources are scarce, departures from best practice risk management should not compromise the rigorous identification and assessment of risks. Cutting back in these areas has more wide-ranging consequences than openly acknowledged deficiencies in control.

Methodology

A number of smaller associations (less than 1,000 units) were circulated with a questionnaire which was selectively followed up by an interview with the executives responsible for risk. The survey covered the following areas:

responsibilities for collecting and receiving information on risk;
the use of outside third parties as facilitators;
a sample listing of the association’s risks (the risk register).
how probability/impact is assessed and how the risks are prioritised;
periodic board and annual financial reporting on risk and sample reports;
and details of the current risk management framework.

Conclusions

The respondents to the survey generally had the following good practices:

most had a register of all the risks, though not all had assessed and prioritised them,
the risk register had been reviewed and approved by the board by most of the associations;
and some associations had risk policy documents.

Whilst most associations had, on the face of it, comprehensive risk registers, very few assessed the probability and impact of the risks and even fewer prioritised those risks. Many associations had long lists of 40 to 50 risks with little indication of how significant they were regarded.

Contact info

Housing Corporation
enquiries@housingcorp.gsx.gov.uk

Publication date

Project finished

/03/2006

Researcher

Roger Lustig and Dr David Bobker, Lustig and Co.

Links

Visit the Housing Corporation website

Download the 'Managing Risk for Smaller Housing Associations' Report (PDF, Eng, 320 KB)

Document type

research

Themes

Urban Policy > Housing

Keywords

Housing management