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Board statement on
risk management
The Board of Trustees and Management of the World
Agroforestry Centre have reviewed the implementation
of the risk management framework during 2010 and the
Board is satisfied with the progress made.
The Board of Trustees has the responsibility of ensuring
that an appropriate risk-management process is in
place to identify and manage current and emerging
significant risks to the achievement of the Centre's
business objectives, and to ensure alignment with CGIAR
principles and guidelines as adopted by all CGIAR
Centres.
These risks include operational, financial and
reputational risks that are inherent in the nature, modus
operandi and locations of the Centre's activities. They
are dynamic, owing to the environment in which the
Centre operates. There is potential for loss resulting
from inadequate or failed internal processes or systems,
human factors or external events.
Risks include:
- Misallocation of scientific efforts away from agreed
priorities
- Loss of reputation for scientific excellence and integrity
- Business disruption and information system failure
- Liquidity problems
- Transaction processing failures
- Loss of assets, including information assets
- Failure to recruit, retain and effectively utilize qualified and experienced staff
- Failure in staff health and safety systems
- Failure in the execution of legal, fiduciary and Centre
responsibilities
- Withdrawal or reduction of funding by donors due to the
financial crisis
- Lack of funding to, or non-prioritization of agroforestry
in the CRPs due to the CGIAR change management
process
- Subsidization of the cost of projects funded from
restricted grants and/or partial non-delivery of promised
outputs, due to inadequate costing of restricted projects.
The Board has adopted a risk management policy
that includes a framework by which the Centre's
management identifies, evaluates and prioritizes risks
and opportunities across the organization; develops riskmitigation
strategies that balance benefits with costs;
monitors the implementation of these strategies; and periodically reports to the Board on results. This process
draws upon risk assessments and analysis prepared
by staff of the Centre's business unit, internal auditors,
Centre-commissioned external reviewers and the
external auditors. The risk assessments also incorporate
the results of collaborative risk assessments with other
CGIAR Centres, System Office components, and other
entities in relation to shared risks arising from jointly
managed activities. The risk management framework
seeks to draw upon best practices, as promoted in codes
and standards promulgated in a number of CGIAR
member countries. It is subject to ongoing review as part
of the Centre's continuous improvement efforts.
Risk-mitigation strategies include the implementation
of systems of internal controls, which, by their nature,
are designed to manage rather than eliminate risk. The
Centre endeavours to manage risk by ensuring that
the appropriate infrastructure, controls, systems and
people are in place throughout the organization. Key
practices employed in managing risks and opportunities
include business environmental scans, clear policies
and accountabilities, transaction approval frameworks,
financial and management reporting, and the monitoring
of metrics designed to highlight positive or negative
performance of individuals and business processes
across a broad range of key performance areas. The
design and effectiveness of the risk-management system
and internal controls is subject to ongoing review by the
Centre's internal audit service, which is independent of
the business units, and which reports on the results of its
audits directly to the Director General and to the Board
through its Finance and Audit Committee.
The Board also remains very alive to the impact of
external events over which the Centre has no control
other than to monitor and, as the occasion arises, to
provide mitigation.
Board statement on
risk management
Eric Tollens
Chair
Board of Trustees
World Agroforestry Centre
8 April 2011 |
