Whatever the size and purpose of the club, managing risk is a key board responsibility. Boards should develop a risk management framework that involves a process to identify all risks facing the organisation and implement effective risk management strategies.

It is essential that an organisation regularly review its’ risk exposure across all facets of the organisation. Through this process, organisations should address the likelihood and impact of all possible incidents and assess the actions required to minimise, avoid, or eliminate potential risks.

In addition, some events often need a comprehensive risk assessment to be done (i.e., the hosting of a large sporting event). In this situation, a business case should be developed as part of normal risk management processes to assess the impact and potential outcomes, negative or positive, of such an event. 

For Victorian based sporting organisations, the Victorian Child Safe Standards (the Standards) apply to all sporting organisations that provide services or facilities to children within Victoria. This is a legal requirement for sporting organisations of all sizes from grassroots clubs all the way through to National Sporting Organisations. The Standards relate to developing a child safe culture within an organisation and include requirements to have practices, procedures, and policies in place to prevent and respond to allegations of child abuse.

In addition to this, Principle 4 of the Australian Institute of Company Directors, Good Governance Principles and Guidance for Not-for-Profit Organisations, outlines some of the common types and categories of risks to be considered. This includes, but is not limited to:

• Employment issues (e.g. wrongful dismissal, harassment)
• Volunteers (e.g. injury to the individuals themselves and/or damage caused to others or property as a result of their inadequate training or screening)
• Physical spaces and equipment (e.g. fire, workplace health and safety issues, theft or misuse, public liability)
• Records (e.g. legal requirements to keep records, confidentiality)
• Cash receipts and payments (e.g. inaccurate records, lack of internal checks and balances) and
• Financing (e.g. grant dependent organisations)

It can be helpful to think of risks in broad categories, such as:

• Compliance risks (e.g. failure to lodge statutory information in allowed time)
• Financial risks (e.g. loss of funding, insolvency, expense blow-out)
• Governance risks (e.g. ineffective oversight)
• Operational or program risks (e.g. poor service delivery)
• Environmental, including event risks (e.g. natural disasters and states of emergency)
• Brand and reputational risks (e.g. due to exacerbated stakeholder or community perceptions, from major event failure or adverse performance commentary via traditional and/or digital and social media channels) and
• Strategic risks (e.g. altered stakeholder behaviour, increased funding competition)

The board should implement an effective compliance system to ensure that:

• The organisation complies with all relevant statutes, regulations and other requirements placed on it by external bodies,
• Effective internal controls exist and there is full and accurate reporting to the board in all areas of compliance,
• The organisation is financially secure and is able to meet all its financial obligations when they fall due, in the normal process of business, and
• The legal duties of individual board members are upheld, including the requirement of board members to:
  • Act in good faith and for a proper purpose,
  • Exercise due care and diligence,
  • Ensure the organisation does not continue to carry on its business while insolvent, and
  • Meet the requirements of various other federal and state laws that directly impact on the organisation.

The following documents provide further information and guidelines on risk management and compliance:

Good Governance Principles and Guidance for Not-for-Profit Organisations (The Australian Institute of Company Directors)

Risk Management Principles and Guidelines (Australian Government)

Insurance and Risk Management for Community Organisations (Justice Connect)

Guidelines for managing risk in sport and recreation organisations (Standards Australia/Standards New Zealand)

Safety and Risk Management for Administrators of Community Sporting Organisations (La Trobe University)

Risk Register (Vicsport)

Thanks to VICSPORT for this detailed information.