sport-england-2016-17-annual-report-and-accounts

Board scrutiny of risk management
and risk appetite
The Board ensures there are effective
arrangements for risk management and internal
control at Sport England. The Corporate Risk
Register and key operational risks are provided
to, and scrutinised by, the Audit, Risk and
Governance Committee at each meeting. The
Corporate Risk Register is then provided to the
Board for its review, scrutiny and input every six
months.
Our approach and the system of internal control
are designed to manage risk to a reasonable
level rather than to eliminate all risk. The Board
considers Sport England’s risk profile and the
Board’s risk ‘appetite’ (i.e. the level of risk it is
prepared to tolerate in order to meet its strategic
objectives) every two years or in line with any
changes to Sport England’s strategic objectives.
The Board believes that it is important that Sport
England is innovative and can take managed
risks in order to achieve increased participation.
Sport England’s current risk appetite, agreed
at the Board in January 2015, is described as
follows:
Sport England continues to have a medium
risk appetite overall, but recognises that it has
a complex and multi-faceted portfolio of risks.
Accordingly, Sport England may diverge from
a ‘default median’ position, in the following
circumstances:
1. Sport England has a very low risk appetite
around transparency and control of governance
and finance, and this will not change.
2. Within its framework of evidence-based and
well controlled decision making, Sport England
is currently willing to adopt a higher risk appetite
in order to drive increased participation in sport,
including:
• Innovations, where outputs can be
evidenced and evaluated
• Undertaking small exploratory projects
to learn and to gather evidence
• Remaining assertive on performance
management, including taking action
to shift investments where performance
is poor
• Developing potential sources of
partnership and/or commercial income,
providing there is a focus on best value for
money and that reputational risk can be
satisfactorily managed.
Now, as we begin to deliver our new strategy,
and after the induction of a number of new Board
members, we have a Board workshop planned
in October 2017 to review Sport England’s risk
management strategy, including the Board’s risk
appetite, in order to ensure appropriate alignment
with our new 2016-2021 strategy.
Managing our key delivery risks
During the year, the Executive Group and the
Board have actively reviewed the Corporate Risk
Register, with risks being added, consolidated
and closed as a result of these reviews. For
example, we have closed the risk related to
a potential reduction in Exchequer funding
following the comprehensive spending review
announcement, and we have closed the risk
relating to a change in the Royal Charter following
a successful Judicial Review outcome.
Last year, I highlighted the operational and
reputational risks we needed to manage as we
developed our response to the Government’s
Sporting Future strategy with the publication of
our strategy, Towards an Active Nation and the
new Code of Sports Governance, which contains
a mandatory set of requirements for those
organisations seeking public funding.
Managing the implementation of the new strategy
continues to be a dominant theme in the risk
environment. Alongside a continued emphasis
on ensuring the effective management of
organisational change, a risk that has evolved
this year relates to the need to simultaneously
manage the transition from existing to new
programmes. This risk has been exacerbated
because many of the new programmes and
approaches that are core to our new strategy
relate to areas of work outside Sport England’s
recent experience. The strategy has a focus
on physical wellbeing, mental wellbeing,
individual development, social and community
development and economic development. Some
projects are therefore fundamentally different to
our previous approach and involve working with a
much wider range of partners, many of them for
the first time. At the same time as we are working
on these new programmes, we are restructuring
the organisation and closing old programmes.
The Executive Group and the Board have
maintained robust oversight of these areas
and worked to ensure risks are mitigated. We
have recognised the importance of maintaining
effective communication with staff throughout
the organisation so that the workforce has had
a clear and common understanding of what is
required of them in relation to implementing the
new strategy, and we have planned development
support for colleagues. To manage increased
pressure, we are phasing the introduction
of new programmes, the implementation of
the organisational structure and the closure
of programmes as they reach completion.
Accountability Report