elliot@strategyandgovernance.co.uk
07896 894 711
As an ex auditor I am delighted not to be knee deep in the charity accounts season as we currently are. However, as a trustee and charity advisor, I see this time as a golden opportunity to see if you are getting value for money out of your auditors or examiners or even if you are working together with them in the most efficient way possible.
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“We have dealt with them for ages and they have always paid us before”…… the words of comfort often uttered by suppliers facing for the first time an unpaid invoice from a regular customer with little sign of it being paid without recourse to legal action.
It’s unlikely that you will be consistently paid on time, every time, if you are lax with your paperwork. Sometimes you may not even get paid at all.
I never stop learning which is why, no matter what networking event I attend, I always manage to learn something. Whether it is talking to another business or listening to a guest speaker there is always some little tip or another which I like to either use myself or to pass on.
Terms & Conditions are absent or barely there! Startling but true – many successful and professional businesses have inadequate terms and conditions, or worse still, none at all.
On one of my forays into networking recently, I heard a talk about Credit Management and how to get it badly wrong. I was blown away by how easily you can "cock it up" and so I asked the speaker, Ken Brown of Direct Route Collections Limited if he would do a guest blog for me.
When business people see the increasing number of articles coming out about the collapse of Carillion, there is a temptation to think that it is solely as a result of them growing too big and too fast.
This week commencing 13th November is #trusteeweek and I thought that rather than write a technical article about the rules and regulations, I would instead write about what being a trustee has meant to me and done for me.
An excellent article by Stella Smith in the Third Sector newsletter on the failure to get the bridge built through lack of funding despite raising £37m from primarily government sources.
The use of restricted funds creates a mixed response from charities. Donors like them because they can be specific about what the money is used for whereas charities would prefer to use the money without restriction to give them more flexibility. Both have valid arguments but in fact restricted funds have a very useful place in charity funding.
Charities and PLCs have long recognised the importance of risk management. In both sectors, assessing and managing risk is embedded within governance frameworks and recommended practice — although recent reports suggest there is still room for improvement, particularly within parts of the charity sector.
Owner-managed businesses, however, often take a very different approach.
Many SMEs focus understandably on day-to-day trading, sales and cashflow, but formal risk assessment is frequently overlooked. Yet private companies, sole traders and partnerships are often just as exposed to risk as larger organisations — and in some cases even more vulnerable because they have fewer resources to absorb problems when they arise.
Most businesses recognise financial risk, although the continuing number of business failures suggests that even this is not always assessed properly. However, financial risk is only one part of the problem
Reputational RiskIn today’s digital world, reputational damage can happen quickly and publicly.
A restaurant that delivers poor service may find itself criticised across review platforms such as Tripadvisor. A manufacturer that misses a critical delivery or supplies the wrong order may suddenly discover complaints spreading across social media platforms. We see complaints about businesses ranging from local to multi national all the time.
The question for every business is simple: how prepared are you to respond? Is your complaints process robust, timely and consistent?
Environmental and Market RiskEnvironmental risk is not simply about climate issues.
For retailers, for example, location and changing customer behaviour can create significant commercial risk. Is your business operating in an area that is growing and attracting investment, or are surrounding premises becoming vacant? Is reduced footfall impacting sales as more customers move online? Most importantly, are you adapting quickly enough?
Markets evolve constantly, and businesses that fail to respond can quickly find themselves left behind.
Operational RiskOperational risks affect every organisation.
How resilient is your supply chain? If you import goods, how vulnerable are you to political instability, transport disruption or changing tariffs? How exposed are you to fluctuations in raw material costs?
Internally, are your staffing procedures fit for purpose? Do employment terms remain relevant and competitive? Have you considered succession planning and the loss of skills as experienced employees approach retirement?
And in an increasingly digital world, one critical question remains: is your IT backup both reliable and recoverable within an acceptable timeframe?
Technology, Cyber and Global Political RiskBusinesses today also face risks that barely existed a decade ago.
Cyber attacks are no longer a problem only for large corporations. SMEs are increasingly targeted because criminals often assume their systems and controls are weaker. A single ransomware attack, phishing email or data breach can cause operational disruption, financial loss and serious reputational damage.
At the same time, businesses are rapidly embracing Artificial Intelligence. AI offers enormous opportunities to improve efficiency, customer service and decision-making, BUT it also introduces new risks around data protection, accuracy, intellectual property and over-reliance on automated systems. Businesses need to ensure that AI is implemented responsibly and with proper oversight. Remember, it is a tool to be used, not an automatic solution.
Global political and economic uncertainty also continues to affect organisations of every size. Wars, trade disputes, sanctions, inflation, supply chain disruption and sudden regulatory changes can all impact pricing, recruitment, investment confidence and customer demand.
The reality is that businesses now operate in a far more interconnected and unpredictable environment than ever before. Risk management is no longer simply a compliance exercise — it is an essential part of long-term resilience and sustainability.Risk Management Is Everyone’s ResponsibilityThe reality is that risks rarely exist in isolation. Strategic, operational, environmental, reputational and financial risks are all interconnected.
Every business — regardless of size — should assess risk continuously. For smaller businesses, this may not require a highly formal process, but risk awareness should still form part of the business model and decision-making culture. Larger organisations may require more structured processes, including formal risk registers and regular reporting.
Importantly, effective risk management should involve the whole organisation. Even junior employees often identify operational concerns long before management becomes aware of them. Encouraging open discussion around risk can help businesses identify issues early and avoid costly problems later.
I regularly carry out risk reviews for SMEs and provide practical risk management training tailored specifically for owner-managed businesses.
A well-managed business is not one that avoids risk entirely — it is one that understands risk, plans for it and responds quickly when challenges arise.
If you would like an informal, free and no-obligation initial discussion about the risks facing your business and how they can be better managed, please contact me at:
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FAILURE TO MANAGE RISK EFFECTIVELY WILL EVENTUALLY COST YOUR BUSINESS MONEY.
A new Charity Governance Code has just been published. Although it has not been produced by the Charity Commission, they had observer status on the steering group which created the document.
Have any questions or want to find out more?
Call Elliot Harris on 07896 894 711 or email elliot@strategyandgovernance.co.uk.
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