Risk management - just another business tool?

By Alan Hough | 13 November 2017

Risk management - a blog from Stewardship

Without the many examples of risk-taking written about in the Bible (e.g. David, Esther and Ananias to name but three) history may well have taken a somewhat different course. Quite often it appears as if a degree of risk-taking is necessary in order to break down barriers and advance God’s kingdom.  This means that for some modern day churches there is real concern that any form of risk management will inhibit risk-taking and will serve to constrain God working through the church.

 

This is not a view that we agree with, as we see risk management as a positive step in helping churches better plan to achieve their objectives, allowing them to handle risk in a controlled way. We sense a healthy tension for churches between faith, action and risk and see effective and successful churches as those which are not paralysed by the fear of risk but at the same time are not reckless in their actions.

 

Secondly, most churches are generally established as charities and as such operate in a world of charity law and regulation and the Charity Commission makes clear that regardless of size, charities should take a systematic approach to the management of risk. The Charity Commission also stresses that any risk assessment should be designed so that charities can manage those risks which would prevent them achieving their objectives.  Good risk management is not about inhibiting, but about going forward with your eyes open.

 

Risk management for churches is not really any different from that of any other organisation and can be boiled down to three stages:

  • Identification of risk;
  • Risk assessment;
  • Devising a plan of action.

We have recently written a briefing paper (“Is Risk Management Right for Churches?”) which explores risk management in churches a little further, sets out some of the actions which are available to churches at the end of a risk management process, and provides an example of a risk assessment methodology which churches may want to adapt and use. 

 

Used properly, we do not see risk management as just another business tool, but as something which can really help any church better achieve its objectives.


Read more...

Receipts and payments accounts; you might want to give it another look

Persons with significant control: What is it? Who are they? What do we need to do?

 

Briefing papers..

Is risk management right for churches?

Raising the Standard: Transforming the Culture of Money in the Church


 


 

Posted by Alan Hough

Alan has an accounting background having worked in “the City” for more years than he cares to mention. He now works as an advisor and a consultant to a number of Christian churches and charities seeking to help them better understand and embrace their finances.  On a good day, you might find him on out on his bike or at White Hart Lane cheering on his beloved Spurs.

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