The Risks around Risk.

Last week’s Trustees’ Week was full of insights and new ideas, from the excellent Festival of Trusteeship, to the launch of the updated Charity Governance Code and new research exploring the difference between 'heart-driven' and 'head-driven' trustees.

Rethinking Risk

One of the many stand-out discussions during the Festival was on the topic of risk, particularly the contribution from Sabrina Segal. She also recently published two articles. One, available here, is about the link between organisational culture and risk. In the other, a little tongue in cheek, she writes about the demise of the Risk Matrix.

Sabrina argues that the compliance-based approach to risk is no longer fit for purpose. In her words: “A compliance-driven culture… treats risk management as a bureaucratic exercise, producing policies that are technically sound but behaviourally hollow.”

She argues that the emphasis on risk aversion is a risk in itself, and how creating a culture of caution and negativity can make people scared to raise concerns or to take initiative. 

Her alternative is to develop a healthy culture that promotes transparency, shared accountability, and the open use of evidence. And being open to opportunity as well as risk.  

In her view, the starting point for risk analysis must be the organisation’s objectives. To get the best analysis, she recommends convening cross-functional teams of executives, staff, and, when prudent, Trustees, to discuss a range of questions;

What are we trying to achieve? 

What are the threats stopping us from doing so, and the opportunities that can enable us? 

What are the causes and triggers of these, and how can we monitor for ‘weak signals? 

What can we do to prepare for both threats and opportunities?

What resources do we need to get there? 

These discussions create a golden thread from vision to delivery. And periodically revisiting them keeps you prepared for both threats and opportunities. 

As Sabrina concludes, “the task is not to manage culture as a risk but to harness it as an opportunity.” By embedding curiosity, transparency, and forward-looking dialogue, charities can become safer and braver. Learn more about Sabrina’s work here. 

The Updated Charity Governance Code

The revised Code places greater emphasis on culture. A new principle, Ethics and Culture, has been added, while the previous Risk & Control principle is reframed in a more open tone as Managing Risk & Resources. See the graphic shown. 

The guidance now encourages trustees to be “proactive in identifying and addressing risks and opportunities.” This shift mirrors the thinking set out by Sabrina Segal, moving the emphasis from compliance and control to a stronger focus on culture and curiosity.

Trusteeship: The Role of Heart

New research published last week explored what makes trustees effective. It concludes that while skills and experience remain important, it is connection to the mission – being heart-driven – that has the greatest impact.

The report suggests charities should:

-   Foster intrinsic motivation by sharing beneficiary stories, designing flexible governance roles, and keeping board papers engaging and purposeful.

-   Prioritise motivation profiling during recruitment, ensuring that passion for the mission is valued alongside cognitive diversity of age, background, and experience.

Insights from Hospice Governance

This finding resonates strongly with the hospice sector. Across more than 30 hospice governance reviews I have undertaken via Digi-Board, average performance ratings are consistently higher than those of over 100 other charities that have used the tool. 

There are two likely reasons for this. First, hospices operate within a particularly demanding regulatory environment – as healthcare providers, clinical employers, lottery operators, etc and not just charities. 

Second, most hospice trustees I meet are truly heart-driven: they bring deep personal connection to the mission alongside the professional expertise their roles demand. As such, they will more likely to see opportunities, whilst staying aware of risks. 

At times, that passion can draw trustees into operational detail. But, by adopting the approach set out in the refreshed code and advocated by Sabrina Segal, boards can strike a powerful balance – applying both head and heart to ensure hospices remain resilient, innovative, and true to their purpose.