risk management powerpoint

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GREETINGS FROM CARITAS BANGLADESH

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Page 1: Risk Management Powerpoint

GREETINGS FROM

CARITAS BANGLADESH

Page 2: Risk Management Powerpoint

PRESENTATION ON

RISK MANAGEMENT

Page 3: Risk Management Powerpoint

PART- A: An OVERVIEW

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Risk Management

The risks are threats, negative effects or problems which can occur further to an event or an action in a company or an organization.

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Risk Management Risk management is the identification,

assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.

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Risk Management

Risk management is the process to identify, assess, manage and control potential events, or situation, to provide reasonable assurance regarding the achievement of the organization’s objective.

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Risk Management Risk Management is a procedure or

practice that non-profit and charitable organizations use to reduce exposure to liability.

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Origin of Organizational Risks

The risks can result from two main sources: from the outside of the company (external risks) and the inside of the company (internal risks).

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Origin of Organizational Risks

i) External RisksThe external risks result from changes in the environment of the company (political, economic, technological, sociological changes) which can exercise a negative influence on the objectives and the strategies of the company.

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Origin of Organizational Risks

ii) Internal Risks The internal risks can result either from

processes, or from the management information.

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Risk Management Cycle

The risk management cycle consists of seven steps and formalises a natural thinking process that everyone applies subconsciously when faced with a real or potential opportunity or danger:

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Risk Management Cycle

1. Establish the Context

4. Evaluate Risks 7. M

onito

r and

Rev

iew

6. C

omm

unic

ate

and

Cons

ult

5. Treat Risks

3. Analyse Risks

2. Identify Risks

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Risk Management CycleEstablish the context- what we do interacts with the wider environment.Hold a workshop from a cross-section of the work place, with every key area present. Determine the internal and external environment that could have an impact on achieving objectives. Consider:

The objective of the organisation/activity for which we develop the plan

How far to extend the scope to ensure all relevant risks are covered

The strengths and weaknesses of our stakeholders The level of risk we are prepared to accept without

being reckless

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Risk Management Cycle

Identify risks- a risk that has not been identified, cannot be managed.Consider how decisions and actions we take will affect the organisation’s objective. Consider the source of the risk and what is in place already that stops or lowers the impact of the risk.Analyse risks- don’t assume existing controls are good or cost effective. Within the context of existing control measures, determine how likely it is for the risk to occur and, if it did, what the consequences would be.

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Risk Management CycleEvaluate risks- it isn’t possible to manage every risk. Prepare a prioritized list of risks for further action. Decide which risks need to be addressed now; which ones later; and which ones are tolerable without further action.

Treat risks- risks change constantly. If risks are not at a tolerable level, identify the most cost effective treatment. Ensure you have the resources to treat the risks such as know-how, finances, facilities, staffing. Be mindful that the risk environment and treatment strategies constantly change and adapt accordingly.

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Risk Management Cycle

Communicate and Consult- important throughout the whole process. Hold meetings and workshops. Identify and involve all internal and external stakeholders, tell them why we develop the plan, what’s in it for them and what we are going to do. Communicate with stakeholders at every step of the process.

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Risk Management Cycle

Monitor and Review- risks are never static. Regularly review the list of risks and treatment actions and report up the line. Are there new risks? Are treatment actions for existing risks still relevant? Can we delete old risks?

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Why Risk Management is Important

Risk Management protects and adds value to the organization and its stakeholders through supporting the organizational activities by;

i) Providing a framework for an organization that enables future activity to take place in a consistent and controlled manner.

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Why Risk Management is Important

ii) Improving decision making, planning and prioritization by comprehensive and structured understanding of business activity, volatility and project opportunity/ threat.

iii) Contributing to more efficient use/ allocation of capital and resources within the organization.

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Why Risk Management is Important

iv) Reducing volatility in the non essential areas of the business.

v) Protecting and enhancing assets and company image.

vi) Developing and supporting people and the organization’s knowledge base.

vii) Optimizing operational efficiency.

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The Benefits of Risk Management

It is not a process for avoiding risk. The aim of risk management is not to eliminate risk, rather to manage the risks.

Good risk management provides upward assurance from business activities and administrative functions, from department to faculties, to the senior management team and ultimately to the governing body.

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The Benefits of Risk Management

The potential benefits from risk management are:

i) Support strategic and business planning;ii) Support effective use of resources;iii) Promote continuous improvement;iv) Fewer shocks and unwelcome surprises;v) Quick grasp of new opportunities;vi) Enhancing communication between

organizations and stakeholdersvii) Reassuring stakeholders, etc.

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PART-B

Good Practices of Caritas Bangladesh following CI Assessment Tool

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1. Operational Risk

It has been carefully and (bi) annually assessed what external risks may occur and prevent the National Caritas from achieving its objectives, e.g. the risk of high staff turnover (essential staff), disaster, when donor(s) pull out immediately and the NC has put measures in place to reduce and/ or control these risks. The political and social factors of the country and their possible influence on the operations is taken into account as well.

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Staff Turnover

The potential, skilled and experienced staff are leaving the organization with high salary and upgraded position offered by other organizations. The turn over of staff is higher at the field level. In order to reduce the staff turn over, a number of steps have been taken by CB as mentioned below:

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Caritas reviews its Pay Scale and Salary in every three years considering the money inflation, price hike of commodities, comparative salary status of other similar organization, etc. Recent Evaluation of Caritas has also recommended reviewing present salary structure for the employees of Caritas. Next review of salary is due from July, 2012.

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In addition to the long term benefits, such as provident fund and gratuity fund, CB has adopted schemes for health care, insurance and compensation for the employee and his/ her spouse.

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The project staff at the field level who were on contractual basis have been regularized in the pay scale. They are now getting long term benefits like provident fund, gratuity as well as health care, compensation and insurance scheme benefits.

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For the female staff, a number of steps have been taken such as, during pre and post-partum (for one month before the birth of a child) and lactation period (for three months after joining the office upon completion of maternity leave), female employees may be allowed flexi-time; they can bring their children at the child care centre; during the outstation they are allowed to bring their children with attendant at the cost of CB.

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During the transfer of staff, school-going children and station of their spouses are considered positively.

Staff are considered for promotion on the basis of their performance. Annual Appraisal is in place.

The experienced and potential staff is being given opportunity for higher study/ training in country and abroad universities/ institutes under Caritas Human Resource Development program.

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Political Factors Attitude of the politicians, Government

officials towards NGOs is not very positive. The Government is trying to have more control over the NGOs. We are to comply with many formalities/ requirements of the Govt.

CB is keeping good relationship with the NGO Affairs Bureau and Govt. Departments complying with all guidelines/ rules/ requirements. Any staff of CB is not allowed to involve directly or indirectly in the politics.

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Social Factors Demand of the society is unlimited. On

the other hand, resources are limited. We have to balance between demand and resources. This causes dissatisfaction of the society.

Social elites influence the NGOs activities.

Business groups of the country are not very positive towards NGOs.

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2. Disaster Preparedness

The National Caritas has an updated manual in place for large scale disaster preparedness, provides regular training and updating workshops, has organized (potential) access to additional storage and transportation means when the need arises and has prepared (voluntary) staff to be available on short-term notice.

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Bangladesh is known as one of the most disaster prone countries in the world due to its geographical location. Flood, cyclone, tidal surge, landslide, tornado, riverbank erosion, drought and earthquake are very common in Bangladesh.

Caritas has its own Disaster Manual which is well recognised/ accepted by the Bureau of Disaster Management of the Government.

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Raise public awareness on Disaster Risk Reduction (DRR) among the disaster vulnerable community. Various program like displaying of education materials, school program, simulation, day observation, meeting, and workshops on DRR are being organized. This has become helpful for raising public awareness on DRR.

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Increase disaster preparedness and early warning system in the disaster vulnerable community. Preparedness works for food, water and sanitation and shelter at family and community level are being undertaken before disasters.

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Caritas National and regional staff are trained on the Code of Conduct for International Red Cross and Red Crescent Movement and NGOs in Disaster Relief, HAP (Humanitarian Accountability Partnership) Benchmarks, Sphere - Humanitarian Charter and Minimum Standards in Disaster Response and Good Enough Guide (GEG) for accountability and impact measurement.

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Caritas has been practicing Sphere Minimum Standards and Code of Conduct in its emergency response works for a long time. Caritas has also started practicing HAP and GEG in its humanitarian response works focusing on the accountability to beneficiaries/disaster affected community. Caritas has actively participated in Sphere review workshops at National and Regional level and also shared its good practices/learning on accountability and impact measurement in national and international networks.

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During emergency, Emergency Response Team is formed for need assessment and distribution of survival materials to the victims.

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3. Insurance Policy

The National Caritas regularly (at least every five years) assesses the appropriateness of its insurance policies against, fire, hazards, burglary and natural disasters.

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CB has very recently approved an insurance scheme for each employee at the contribution of the organization. That is, no contribution is taken from the employee. This policy will be reviewed at the time of revision of pay scale and service rules. Usually our pay scale and service rules are reviewed after 3 to 5 years.

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Program participants under Micro Finance Program especially their loans are covered under the separate insurance policy.

All vehicles are insured by the insurance companies under the yearly agreement.

We have no insurance policy for office buildings and assets against fire or damages caused by disaster. Few offices have cash insurance with the insurance companies.

CB is thinking for adopting cash and fire insurance in near future to reduce risk.

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4. Theft and Misappropriation

Measures are in place that realistically prevents the risk of theft and misappropriation of inventory by staff, including lists of responsibilities of staff for all NC assets, gate control, secure storage of expensive items, and safe keeping of cash and other valuables (official documents, etc).

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Caritas has strong financial polices and guidelines that are being properly followed at all stages of work. Besides, Caritas also complies with the Foreign Donation (Voluntary Activities) Regulation Ordinance 1978, different governmental policies and donors’ guidelines.

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Internal Control System is in place. CB has a strong internal audit team under the director control of the Executive Director. They are conducting internal audit on six monthly basis. All accounts are also audited by the Chartered Accountants Firms (statutory audit) on yearly basis.

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CB has a disciplinary actions procedure to take steps against the misconduct including theft and misappropriation. This ultimately reduces the risk of theft/ embezzlement of fund.

Audit Reports and Annual Reports are circulated to Caritas GB, EB and Sub-Committees; Caritas Internationalis; Donors’ agencies/ organizations; Partners; and other stakeholders including the POs leaders/ beneficiaries.

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Audit Report along with the FD-4 and Annual Report including NGO Affairs Bureau’s nine proformas are submitted to the NGO Affairs Bureau, the Prime Minister’s Secretariat, the Govt. of the People’s Republic of Bangladesh. The Annual Report is also submitted to the Governor, Bangladesh Bank and the Secretary, Economic Relation Division (ERD) of Bangladesh.

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CB has recently upgraded its IT system including own server. Under this system, all valuable documents will be scanned and stored in tape drive.

A store register is maintained by the store keeper and updated bin cards are kept next to the items of stores. Stock is counted regularly, and checked with the stock register. Stores are kept in adequate and secure premises with access, properly controlled and can easily be counted.

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Bank Accounts are always registered in the NC name, never in a personal name. All cheques are signed by three of five signatories. Cheque books are kept securely. All cash receipt is recorded immediately and promptly banked. Keys and valuable documents and CD of important documents are kept in Locker.

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Prepared and presented by-

Prodip Stanley Gomes, FCMA, CFC

Administrative Director (Director for Finance, Admin, HR and MFP)

Caritas Bangladesh