HEFCE guidance on risk management says that “the governing body should, as a minimum, ensure that there is an ongoing process for identifying, evaluating and managing the risks faced by the institution...” In this it will be supported in particular by its audit committee. Commercial or trading activities may give rise to financial and reputational risks. These have to be balanced with the benefits of a more entrepreneurial culture.
It is also possible that there could be legal problems associated with consultancy, knowledge transfer work and the setting up of subsidiary or spin out companies if suitable professional expertise is not applied to their oversight. Collaboration with industry and commerce may raise HRM issues concerning remuneration or potential conflicts of interest, and could affect staff attitudes and behaviour. Contractual arrangements must be put in place clearly and in good time, and the governing body will wish to assure itself that this is the case. It is also important for insurance cover to be in place.
More information about the role of the governing body in relation to risk.
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