Report of the Trustees 2005/2006: Page Eight
Risk assessment
The Trustees and senior managers continue to review the risks facing the Charity and have taken a number of steps to mitigate these. A formal review of risks was carried out during the year. This will be revisited during 2006/07, but it identified the need for a greater focus on the strengthening of systems and procedures for the effective handling of the Charity's business. This is necessary in the light of the Charity's rapid growth and development.
Risks are best managed by having a framework within which effective monitoring and review takes place. The Charity's Memorandum and Articles of Association and fiveyear strategy, 'A Cause for Action,' provide such an overall context for the management of the Charity.
The Memorandum and Articles of Association have been comprehensively reviewed, and changes made, to ensure that the Charity will continue to be governed efficiently and to high standards of transparency and public accountability. The fiveyear strategy establishes clear priorities and provides a framework for planning and review. During the course of the year, progress against the range of strategic objectives was reviewed and a reappraisal was undertaken by the Board of future priorities.
New arrangements for the rigorous annual review of research grant awards have been put in place, enabling any difficulties to be identified at an early stage. The first annual reports under these arrangements were received in 2005/06 and were reviewed by the Charity's Research Advisory Committee.
The Charity has continued to adopt a fundraising approach based on a prudent mix of high return donations (e.g. from major donors) and sustainable sources (e.g. direct fundraising) - maximising income potential and spreading risk. This approach underpins the development of the Charity's new Fundraising Plan – an auditable document setting out detailed programmes for the strategic growth in income.
An annual budget is debated and approved by Trustees and forms the basis for financial monitoring. For the first time in 2005/06, budgeted expenditure was based on a more cautious, 'core' income budget. Further developments would only be approved by the Chairman, Treasurer and Chief Executive if income exceeded the core. Quarterly reforecasting of financial performance was also introduced, enabling any emerging difficulties to be identified early and effectively managed. The re-forecasting also included an explicit statement on risks. Financial review is undertaken by the Finance Committee on behalf of the Board, but the Board itself also receives reports on financial performance. The Senior Management Team regularly monitors financial performance, provides regular reporting narrative to Trustees and invites ongoing questioning.
Explicit delegated authority arrangements have been agreed by the Trustees for the commitment of resources. These have been developed following the identification of risk to the Charity in relation to different types of commitment. A staff performance and development system continues to provide a framework for ensuring that the work of all employees is tied clearly to the overall strategy, and that regular monitoring of performance is carried out.
The need for enhanced financial policy and controls and greater strategic management of resources has been recognised through the progressive strengthening of financial leadership. In 2006/07, this will take the form of the appointment of a Director of Finance and ICT.
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