Some high-profile corporate failures have, among other factors, led to a much greater focus on systems of risk management, both in the private sector, and more recently in higher education. This has been a catalyst for much of the ‘best practice’ guidance on risk management and good governance both in the business world and in higher education. Best practice now sees risk management and good governance not merely as a way of avoiding risk, but as an integrated part of the planning process.
In the private sector there have been two particularly influential reports brought together within the Financial Reporting Council (FRC) Governance Code:
The Combined Code provisions are mirrored in the CUC Code of Governance (included within the CUC Guide). The CUC Code states that "institutions must have a sound system of risk management, control and governance", and one of the essential elements of such a control system is seen as "the identification and management of risk embedded in all business systems.”
Governing bodies can support institutions by ensuring that an effective risk management system is in place, and that it informs the strategic development processes which are the board's responsibility. This is likely to help keep the institution heading in its chosen direction, and to be better able to manage the vagaries of getting there.
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