Risk Management Framework
The Risk Management Framework is an integral part of the Internal Control Framework and is designed to support delivery of Imperial’s strategy and its academic mission and comply with all its regulatory obligations. We consider risks in the short, medium and longer term, to help prioritise and direct management time and investment to the right risks. The core principles of the Risk Management Framework are based on the ‘three lines of defence’ model for the management of risk:
Line of defence and responsibilities
First line of defence
The first line of defence lies with the faculties, schools, institutes, departments and process owners whose activities create and manage the risks that can facilitate or prevent Imperial’s objectives from being achieved. This includes taking the right risks. The first line owns the risk, and the design and execution of the University’s controls to respond to those risks.
Second line of defence
The second line of defence is responsible for the design and maintenance of frameworks, polices, procedures and instructions that support risk and compliance to be managed in the first line. It is also responsible for monitoring and judging how effectively the first line is achieving its aims and is more commonly referred to as functional oversight. The second line is directed by management.
Third line of defence
The third line of defence is independent assurance that management operate an effective framework of controls to manage risk and that governance is appropriate around management of risk. The third line is directed by the Audit and Risk Committee and has organisational independence from management.
Principal Risk Dashboard
Our principal risks and approach to responding to them are set out in a Principal Risk Dashboard in the table below.
At the May 2023 and July 2023 Audit and Risk Committee meetings, the updated principal risks were reviewed, approved and subsequently shared with Council. As part of a broader governance review the University Management Board set up an Risk, Compliance and Ethics Committee to support the Audit and Risk Committee in providing oversight of our organisational risk.
Principal Risk Dashboard
Financial sustainability
We are unable to generate sufficient funds, to deliver the College academic mission over the long term.
Risk management approach
Demand for our courses remains strong and we continue to see growth in revenue from tuition fees.
Management efforts are focused on cost management and efficiencies, given inflationary pressures and the increasing costs to the College of pension schemes.
This exercise will become increasingly important if recent increases in energy prices continue over the longer term.
We continue to liaise with relevant external bodies so that they are aware of the impact that changes in our operating environment might have.
Research
Our Research quality, volume and/or impact does not stay at its current level or fails to keep pace with our peer group.
Risk management approach
World-leading research quality and impact is central to the College strategy, and the excellent REF results should feed into our research funding positively.
We continue to invest in our physical infrastructure creating highly desirable working spaces to conduct our research. Our pay structures are continually reviewed to ensure we attract the best academic staff to deliver ground-breaking research outcomes.
Education and student experience
We fail to innovate and improve the quality of our education. We fail to support our students’ wellbeing and quality of their experience.
Risk management approach
The College has offered significant support to students in a wide variety of areas. Hardship and other funds have been put to good use in support of students.
Mental health services have been expanded and our accommodation and catering teams have ensured self-isolating residents were comfortable, and assessments have been covered by ‘safety net’ policies to ensure learners have been treated fairly.
The mixed-mode education model and the need for us to deliver a positive student experience in the context of the pandemic has continued through this academic year and we have invested heavily to revise the curriculum and develop our digital learning.
Supporting our people and culture
Our approach to pay and benefits and culture, including addressing diversity and inclusion, reduce our ability to recruit and retain high calibre staff. The pandemic has introduced the additional complexity of staff’s increased desire for flexible working.
Risk management approach
Pay and benefits are benchmarked annually to facilitate recruitment and retention of all staff. The annual pay review process has been further modified to strengthen pay equity and is underpinned by an Equality Impact Assessment. We continue to publish both our gender and ethnicity pay gap reports.
We have introduced an interim Work Location Framework to support managers and staff to determine their work location. The framework will be reviewed in early 2023 to evaluate the impact on delivery of the College mission.
A number of initiatives have been introduced to strengthen the working culture, including the introduction of College Values and the Imperial Together action plan.
NHS partnerships
Changes in the capability of the College’s NHS Partner Trusts impact delivery of the academic mission of the Faculty of Medicine and the College.
Risk management approach
The College has multiple linkages with NHS Trusts and other health bodies. These partnerships are fundamental to the fulfillment of the College’s mission in biomedical and health research, education and societal impact across all Faculties, primarily in the Faculty of Medicine.
The Imperial College Academic Health Science Centre (AHSC) manages the key relationships between the College and its main acute NHS partners in North-West London. The Dean of the Faculty of Medicine is also a Director of the AHSC.
The North-West London NHS sector is aligning delivery of services across organisations through the newly established Integrated Care System, which also includes Local Authorities with responsibility for public health and social care. The Integrated Care System will be key to future delivery of health services in the North-West London NHS sector and the transformation of services envisioned in the NHS Long Term Plan.
Major incident or crisis leading to business disruption
Failure to grow cash generation from our commercial and investment activities and Advancement.
Risk management approach
COVID-19 has limited the ability of the Advancement division to hold face-to-face engagement with alumni and other donors, however, it has maintained philanthropic growth in challenging times.
The Commercial and Investment Activities team continue to market our commercial real estate and the Enterprise division our Intellectual Property. Different assets and markets are in different stages of recovery but have remained resilient.
Cyber incident and/or data loss
We fail to optimise financial and resource investment in physical infrastructure and/or direct appropriate investment to degrading infrastructure and academic facilities, particularly with our target of carbon neutrality by 2040.
Risk management approach
Our infrastructure has been successfully maintained throughout the pandemic enabling essential workers and key research to continue.
The Estates Strategy Group (a sub-committee of President’s Board) was set up to help ensure competing investments on our estate are appropriately prioritised. It is the prima facie group that informs the Capital Plan and any amendments to it as a result of external influencing factors.
Climate Change
We fail to attract a share of the best international students from diverse markets. We fail to increase our pool of home students from disadvantaged or under-represented backgrounds, risking intervention from the Office for Students and reputational damage.
Risk management approach
The success of our Marketing, Recruitment and Admissions team in collaboration with the faculties has seen a noteworthy increase in applications from under-represented nationalities.
We have established a Marketing, Recruitment and Admissions Group, a Scholarships and Studentships Steering Committee and a project board with colleagues across the College who meet regularly to align pre-enrolment priorities and take appropriate action as one.
We have invested in widening participation initiatives across the faculties as part of our access and participation plan. Significant progress includes the Imperial College London Maths School – with the application process launched ahead of the planned opening in September 2023 – continued engagement in White City and In2MedSchool, made up of over 2,500 doctors and medical school volunteers, who want to give back and inspire the next generation of medical students.
Damage to reputation
We fail to deliver targeted benefits from strategic and operational transformation in support of the academic mission and cannot deliver the scale of improvements and change needed to improve the effectiveness and efficiency of our operating model.
Risk management approach
Our Professional Services Transformation Programme enabled by significant investment in technology has been approved in principle by the Provost’s Board. Detailed planning is underway to understand the potential cost and impact.
The Programme will increase professional service effectiveness, improve data quality and consistency, increase process simplicity, consistency and standardisation, to better support delivery of the Academic Mission.