Event Summary

16 November 2023 

Public bodies are facing increasingly high expectations to deliver services, drive effective performance, and provide value for money, all with tighter funding.  

In this Chairs’ Challenge, PCF members discussed the Board’s role in managing risk and performance.  

With special thanks to Rob Allen, Government and Public Services Performance Lead, Deloitte LLP, for sharing his insights as a guest speaker, and to Keith Fraser, Chair of the Youth Justice Board, for hosting this session.  

Unique risk context 

Public body boards face unique risk contexts. Currently, these include high turnover in government, and timelines for service delivery that are influenced by ministers’ political aims. Moreover, public bodies face parliamentary accountability and increased scrutiny on efficiency of performance and impact achieved, including through the Public Bodies Review Programme. Finally, public bodies also face uncertainty about the next election, ministerial changes, and the future reform agenda.  

Public bodies, along with their sponsoring department, have a shared endeavour to respond to these potential risks together. The dynamics of this relationship therefore can be complex and challenging.  

Dispelling risk management myths 

Myth 1: The main purpose of risk management is to minimise risk. 

Reality: It is largely unrealistic to expect that organisations can prevent all risks from occurring. Organisations may be misguided in believing that they are, or should be, entirely ‘risk-averse’ across all areas. Instead, organisations should build a framework that enables them to analyse and manage risk across different areas. 

Myth 2: Risk management is a compliance activity delegated to a particular team. 

Reality: Risk management and performance monitoring are crucial aspects of governance. These should be embedded in an organisation’s culture.   

Myth 3: Risk management is primarily an activity to satisfy external reporting requirements. 

Reality: The purpose of risk management is to enable better decision-making. Effective risk management serves as an early warning sign, enabling strategic prioritisation and building resilience to new challenges. 

Building an effective risk management framework 

Following Deloitte’s presentation of an example risk management framework, members noted the challenge of shifting from a retrospective approach to being proactive at anticipating and managing risks at an operational level.  

Boards are encouraged to articulate a risk appetite statement, assessing risk tolerance and risk-reward payoff in eight to ten categories. It is recommended that Boards make these statements highly visible and involve teams across the organisation.  

Key risk management behaviours include the ability to challenge and question, look and listen, and engage in regular horizon scanning and scenario planning.  

Effective performance management at an organisational level complements risk management; ideally, reporting on both should be integrated. Boards are encouraged to develop organisational performance metrics and trackers, and plan regular conversations to dive deeply into specific areas. As members expressed interest in further sessions on risk management, PCF will look to incorporate this topic into our member programme in 2024-25.