CMI RISK REGISTER SUMMARY

December 2014
BOARD(14)70 Change Net Change Net
in Risk Risk in Risk Risk

GROWTH STRATEGY STRATEGY & EXTERNAL AFFAIRS

Delivering the Growth Strategy 5 Image & Reputation - adverse press coverage/PR 2

FINANCE & SUSTAINABILITY Campus CMI REMOVED

Adequate Financial Reserves 4 Strategic Insight 4

Pension Deficit Funding 5 Thought Leadership 2

Cashflow 4 CUSTOMER ENGAGEMENT

Investment Portfolio 4 Sales & Marketing 5

Insurances 2 Membership Engagement 5

Retaining Key Staff Skills 5 PARTNERSHIPS & PRODUCT DEVELOPMENT

Staff Continuity 5 Partnerships 4

Governance 2 Product Management 4

Financial Control Environment 5 Development of Chartered Management Consultant NEW 5

Procurement 2 SERVICE DELIVERY

Implications of Bribery Act 2010 1 Awarding Body Compliance 4

Effectiveness of Service-led approach in Awarding Body NEW 4

Membership Retention 4
Key:
Direction of arrow indicates whether risk has increased (Up - Red),
decreased (Down - Green) or remained the same (Level - Blue)
Service Enablement 4

Business Continuity 2
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
GROWTH STRATEGY
Delivering the Growth Strategy
December 2014
RISKS
RISK IDENTIFIED
Impact
H/M/L
The Growth Strategy is not delivered H L
leading to continuing decline in better
qualified managers, income and the
sustainability of CMI.
CMI has insufficient capacity and
capability to deliver the increased
levels of activity anticipated by the
Growth Strategy
IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Likelihood
1 - Lowest
U/P/L/C
9 - Highest
7 • Our Growth Strategy initiatives and supporting
programmes tackle all areas of the business that
will drive and sustain growth - the 2014/15
Business Plan reflects the lessons learned from
Year 1 of the Growth Strategy
• Focus for the second half year is on "fuelling
what works" - additional resource has been made
available to support the development of HEI
partnerships
• Skills requirements assessed for each new
activity undertaken and any gaps are addressed
by appropriately trained internal resource or by
external recruitment/outsourcing
• Resource issues in Sales Teams being
addressed - new National Sales Team Manager,
plus additional field and inside sales staff and
outsourced sales agency, SCI, employed to
deliver second half year sales targets
RISK MANAGEMENT
Quarterly Update
• Income above budget at the half-year
stage - full year income reforecast
increased from £11.5m to £11.75m
• Employer Strategy prepared and
discussed with the Board in October 2014
- this will focus sales effort on defined
sectors and companies
• HEI partnerships have delivered
significantly more revenue in the first half
year than anticipated, with prospects for
the second half year expected to deliver
an increased return - additional sales and
support resource allocated to this sales
channel
• Service-led approach to Awarding Body
has resulted in improving BAU
registrations - new National Curriculum
Manager joined in September and will
focus on increasing registrations from
"larger" approved centres
Net Risk
Person
Further Action Required 1 - Lowest
Responsible
9 - Highest
• Partnership targets revised upwards in All Directors 5
the second half year but supported by
well defined HEI pipeline
• Some re-structuring of field and sales
team targets for the second half year
although the overall targets remain in
place - new recruits to the field and inside
sales teams, as well as the Head of Sales
Teams, have only recently joined CMI
• Expectations of 2014/15 from SCI were
revised downwards - this relationship is
now being terminated.
BUSINESS RISK MANAGEMENT December 2014

RISKS RISK MANAGEMENT

RISK IDENTIFIED IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY

BUSINESS RISK AREA

STRATEGIC OBJECTIVE Gross Risk Net Risk

Impact Likelihood Person
1 - Lowest Quarterly Update Further Action Required 1 - Lowest
H/M/L U/P/L/C Responsible
9 - Highest 9 - Highest

STRATEGY & EXTERNAL AFFAIRS

Image & Reputation
Thought leadership: ethics and
management 2.0
Unfavourable/ inappropriate PR and
media coverage; inappropriate
partnerships; or inaccurate research
published by the CMI
M P 5 ISO 9001 recognition.
Appropriately skilled teams works with all
stakeholders to ensure appropriate work is
published and subject to QA checks.
PR monitored on a daily basis - key messages
assessed. Partnership strategy includes brand
attractiveness criteria. Contingency plans in place
for 'poor' media coverage.
• Press coverage continues to be • Annual plan covering future thematic Petra Wilton 2
monitored and KPIs measure awareness campaigns in alignment with business
strategy has been widely shared
• Baker Tilly audit of research and policy • New Codes for Members on Social
concluded: the Board can take substantial Media activity and their active
assurance that the controls upon which enforcement is now in place.
the organisation relies to manage this risk
is suitably designed, consistently applied
and effective
• Brand awareness and saliency is
measured annually

• Potential reputation risk from social

media activity on LinkedIn networks now
mitigated through stronger rules, greater
staff involvement and active engagement,
and publication of new Codes

Strategic insight
Target key audiences
Failure to understand potential impact
of changes in political and regulatory
environment, in particular in respect to
the qualifications market and the key
regulators Ofqual and QAA
H P 5 The policy and qualifications teams both share
information regarding major changes to the
regulatory environment. We receive weekly
policy updates on relevant business areas and
are also a member of the Federation of Awarding
Bodies that lobbies directly on behalf of ABs and
provides detailed information on regulatory
changes. Networks across other ABs, including
our developing relationship with Pearson, also
provide insights into potential changes. Good
new relationship with QAA following joint report
on 21 Century Leaders.
• Awarding Body and Product • Following the Management 2020 report Petra Wilton 4
Development team developed a and party conferences, we are developing
comprehensive response to Ofqual in stronger relationships with BIS ministers
respect to planned abolition of the and shadows; and will proactively meet to
Qualifications and Credit Framework and flag our work on the Apprenticeships and
major reform of the Guided Learning broader management skills agenda.
Hours policy. There is ongoing work with • The Awarding Body and Product
the Awarding Body and new Product Development Team keep ELT/OLT aware
Development team on reviewing and of key changes
responding to changes affecting CMI
qualifications
•New changes to Apprenticeships and
trailblazer programmes may replace
Management and Leadership National
Occupational Standards - BIS/SFA has
already flagged its support for CMI's
employer-led management trailblazers
and this should progress in Jan 2015.
BUSINESS RISK MANAGEMENT December 2014

RISKS RISK MANAGEMENT

RISK IDENTIFIED IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY

BUSINESS RISK AREA

STRATEGIC OBJECTIVE Gross Risk Net Risk

Impact Likelihood Person
1 - Lowest Quarterly Update Further Action Required 1 - Lowest
H/M/L U/P/L/C Responsible
9 - Highest 9 - Highest

Developing thought leadership
and up-to-date content;
maintaining CMI's Body of
Knowledge
Thought leadership: ethics and
management 2.0
Thought leadership - inability to
position CMI as leading-edge through
its research and White Papers
Knowledge
Management - failure to keep Body of
Knowledge at the forefront of M&L
Practice
M P 5 Appropriately skilled senior managers tasked to
deliver greater exploitation of intellectual capital of
partnerships and membership. Focused thought
leadership agenda on two themes: Management
2.0 and Ethics.
New content strategy in development and
quarterly review scheduled with key senior
managers to ensure alignment to new sales and
digital strategies. Project completed to convert
key content to HTML format (from PDF) and thus
make it more secure and searchable
• Successful launch of the Commission
report Management 2020 and the 21st
Century report with the Association of
Business Schools provided a very strong
content and thought leadership platform
for building the brand's progressive and
forward-looking positioning. Both pieces
have also helped build further
partnerships with both business schools
and employers.
• Funding secured to support
Management Book of the Year and British
Library has renewed MOU - excellent
quality and quantity of entries for 2014-15
• Moving responsibilities for the Petra Wilton 2
Companions and major National Events
to be far more aligned with the thought
leadership, content generation and profile
raising work will help to ensure we are
maximising our opportunities for
positioning the CMI as leading edge.
• Work is in development
on a new Management 2020 National
Awards Programme
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
CUSTOMER ENGAGEMENT
Effectiveness of Sales &
Marketing Initiatives
Realign Sales & Marketing to
grow employers and LOs
Membership Engagement
Recharging membership
engagement
December 2014
RISKS
RISK IDENTIFIED
Impact
H/M/L
Reduction in income from employers
and learning organisations due to:
• The sales team not achieving their
targets
• Lack of lead generation from
marketing campaigns and the inability
to report accurately
• Reduction in Public and private
Spending
• Lack of employer recognition of CMI
and its products
• Continued decrease in learning
organisation revenue
• Significant competitive price and/or
product pressure
Unsuccessful implementation of the
membership engagement strategy
which results in some dis-engaged
members who voice their opinions via
social media.
IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Likelihood
1 - Lowest
U/P/L/C
9 - Highest
H L 7 • Pipeline is now being re-built through business
development days, the sales pipeline will now
reflect client lead times of up to 3 months. Activity
for both inside and field sales is now being
recorded on a weekly basis to track what each
sales person is doing to increase their own
individual pipeline. We now have 5 active field
sales and 4 inside sales executives. The focus is
on building the pipeline to hit Q4 target whilst
ensuring activity levels maintain on a high.
• Full alignment of digital with sales and
marketing; initiatives to drive traffic, capture data,
generate leads and rate visitors based on
engagement to prioritise follow-up.
• Development and execution of the employer
strategy to aid growth of this income stream.
M L 6 • Recruited Membership Networks Manager (start
date Sept 14) to strengthen the support to the
Regional Boards as they move into the execution
stage of their own Regional Board strategies
• Operational & Event
management support recruited to support
regional activities (started July)
• Greater structure and clear objectives set for the
"Buddies" and the Regional Boards - move
towards greater consistency of messaging and
performance across the regions - Review the
current member engagement strategy to ensure
clarity and execution and reduce the burden of
board member churn - Focus on delivery of the
regional awards with a big push on entries
RISK MANAGEMENT
Quarterly Update
• Head of Sales recruited and now in
place, 5 new members of staff recruited
for sales
• Improved sales performance monitoring
reports in place - weekly review meetings
continuing (top-down and bottom-up) -
clear targets set
• Inside sales still out performing field
sales, however with a new injection of
staff this should change
• A new Digital Marketing Manager has
been recruited to continue the success of
the digital marketing campaigns and lead
generation
• Management support for regional events
and operations recruited
• Improved communication and
engagement have been identified as
priorities by the new Regional Boards
• 2014/15 regional
operating plans now in the execution
phase
• Regional Board vacancies are being
filled - Regional Chairs to meet with
Executive and Board of Trustees in July
14 to re-affirm their focus and objectives
• Formal member communications plan in
place covering regular updates (regional
and national) and targeted offers
• National NML Awards to take place in
2015, with a number of regions running
"feeder" events
Net Risk
Person
Further Action Required 1 - Lowest
Responsible
9 - Highest
• Inside Sales team increased to 4 (target Commercial 5
of 5) - Field Sales team with active Director
headcount of 5
• Continued marketing campaigns to
support employer sales but with clearer
success measures
• Toni Marie now back in patch and not
covering the national role, this will now be
picked up by the rest of the team through
clearly defined KPI's
• Service Delivery Directorate taking over
the role in the account management of
approved centres
• To present a clearer member Simon Newlyn 5
engagement strategy which aligns with
the CMI to achieve its objectives but to
also ensure all categories of members
have an engagement touch-point
• All the regional boards working to a
clear and focused set of objectives.
Member Engagement Day held on 7
November to discuss and re-affirm
objectives; this provided valuable input.
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
PARTNERSHIPS & PRODUCT DEVELOPMENT
Development of Partnerships
Partnerships to grow the number Chartered Managers that have been
of Chartered Managers
December 2014
RISKS
RISK IDENTIFIED IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Impact Likelihood
1 - Lowest
H/M/L U/P/L/C
9 - Highest
Failure to execute partnerships that will M P 5 • HE partnership focus is on closing pipeline (at
deliver the income and number of end Sept actual plus pipeline is valued at £1.78m)
and developing further pipeline with target HEIs
forecast (69 current targets, including 30 largest HEs by
student numbers with CMI relationships) to build
on above target sales performance.
*Product focus is on dual
accreditation/CMgr/membership offer which has
been well received. Curriculum development
strand has been developed in response to market
demand.
*Professional body partnership focus is on driving
CMgr numbers and securing ManagementDirect
contracts with engineering and accountancy
bodies
* Regional Boards are being progressively
engaged and have facilitated a number of
introductions with key decision makers and
support for HE curriculum enrichment. This is
working particularly well with W Midlands,
London/SE, NEYH and Thames Valley. Target
partner list has been shared with Regional
Boards, backed up by central communications
*Dedicated HE partner and Professional Body
partner sales resource is growing. First half year
sales successes have led to recruitment of an
additional HE account manager (started August).
A further role is currently being recruited with a
view to sales impact from start 2015/16.
RISK MANAGEMENT
Net Risk
Person
Quarterly Update Further Action Required 1 - Lowest
Responsible
9 - Highest
• Sales performance to end Sept 2014: • HE partnerships sales target 2014/15 is Ian Myson 4
£910k actual v £562k target £1.45m, to translate into £0.9m
• 10 further HE partnership relationships recognised income
established ytd by end Sept •Professional body sales target 2014/15
• HE partner actual plus pipeline value is is £0.2m to translate to £0.1m recognised
£1.78m income
• Professional Body actual plus ytd
pipeline valued at end Sept at £283k
• Partnerships team is headed up by Ian
Myson as Director of Partnerships and
Product Management reporting to CEO,
plus Partnerships Manager, 2 x Account
Managers and one further Account
Manager currently being recruited, and
Partnerships Coordinator
• Relationship Marketing Manager is in
place and has generated valuable partner
collateral and campaigns
• Two dedicated HE Partner Day events
held successfully 19 June and 2 Sept
• Dedicated Partner resource is
established in Awarding Body Quality
Management
• Partnership development has its own
monthly report; an internal Partnerships
Review Group meets monthly to provide
cross-functional coordination and
oversight
• Responsibility for Employer
Partnerships will reside with the
Commercial Director
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
Product Management
Realign Sales & Marketing to
grow employers and LOs
Development of Chartered
Management Consultant
December 2014
RISKS
RISK IDENTIFIED
Impact
H/M/L
Reduction in employer and learning
organisation income as a result of ILM
entering the market with a high-level
integrated learning delivery platform.
Insufficient internal IT support for MD
and to be able to keep up to date and
innovative for our clients. Products
such as CMgr losing presence in the
marketplace whilst focusing on other
products/services
• Project to develop and launch the
designation of Chartered Management
Consultant does not go to plan, does
not develop the necessary market
need, or Privy Council approval is not
forthcoming.
• IC members do not embrace these
developments, which do require
integration of IC within CMI.
• Lack of progress due to priorities
elsewhere in the Institute.
IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Likelihood
1 - Lowest
U/P/L/C
9 - Highest
H P 5 • Continuing programme of improvements to
ManagementDirect
• Ongoing enhancements to blended learning
delivery to employers (online delivered
accreditation being piloted with Birmingham City
Council from Jan 2015)
• Exploring third party collaboration opportunities
eg with FutureLearn (OU-sponsored MOOC
provider)
• Driving engagement with existing CMI services
among learning organisations, learners, employer
decision-makers and users by improving account
management approaches and eg webinars
• Focus of product development is to support the
offers central to the growth strategy (products to
support partnerships and employers)
M L 6 • Project plan in place.
• Partnership developed with the Management
Consultancies Association, which has links to the
large firms and major consultancies - which are
key to the success of ChMC.
• Involvement by IC Advisory Committee and
MCA Board. Joint Steering Group set up and
meets regularly.
• Management Board closely monitors project
progress. Stakeholder plan developed. Sub
groups getting up and running on Product Design
and Stakeholder engagement.
• IC member consultation will commence in early
2015, re IC positioning in CMI and to elicit views
on the ChMC proposal.
RISK MANAGEMENT
Quarterly Update
• Pricing review undertaken - new
employer product prices in place from
May 2014, new AB prices took effect from
September 2014
• Decision taken to remove student
membership fee (£25) from 1 April 2014 -
seen as a negative influence on
registration volumes and approved centre
approval ratings
• Review taking place to inform future
blended learning offer development for
employers and learning organisations
• Steering Group meeting in early
December to discuss progress - Task
groups due to report
• IC Advisory Committee has
responsibility for this project, reporting
through to the Board, and a major
meeting is coming up in January 2015
• The way ahead will be much clearer as
at the end of January 2015
Net Risk
Person
Further Action Required 1 - Lowest
Responsible
9 - Highest
• No major product initiatives planned for Ian Myson 4
2014/15 - focus on leveraging existing
product range
• Simplification/repackaging of employer
offer taking place to support employer
partner development
• Focus on qualifications offer (incl.
pricing) to ensure our range meets
current market needs/funding - reviewing
need for an improved apprenticeship offer
- National Curriculum Manager started
Sept, role includes to identify funding
opportunities on behalf of approved
centres
• Some further development of digital
products for our e-commerce offer later in
2014/15 (individual MD live Oct 2014)
• Regular reporting - to IC Committee, Valerie Hamill 5
ELT, Board of Trustees.
• Monitoring of project plan.
• Involvement of executive teams in the
project tasks.
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
SERVICE DELIVERY
Awarding Organisation
compliance
replacing previous
Qualifications/regulators and
Image & Reputation risks
Realign Sales & Marketing to
grow employers and LOs
Membership Retention
Recharging membership
engagement
December 2014
RISKS
RISK IDENTIFIED IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Impact Likelihood
1 - Lowest
H/M/L U/P/L/C
9 - Highest
Ensuring our policy, procedures, H P 5 • Ensuring we have compliant and effective
guidance, management, processes and policies, procedures, guidance, organisation and
quality assurance ensure compliance resources, processes and quality assurance to
with our Regulator's General ensure compliance
Conditions of Recognition, regulations, • Effective and continuous audit, management of
requirements and good practice. incidents and risks and notification where
required
Non-Compliance could lead to • Effective Governance with regular review of
Regulator sanction up to withdrawing risks and mitigation
recognition and/or a fine of 10% of • Continually checking compliance and confirming
annual income and impact achieving to Ofqual in our annual Statement of Compliance
our business objectives and/or damage • Maintaining a detailed Risk Register in the
to our reputation Awarding Organisation to assist in the risk
mitigation process
Change to Regulatory regime bringing • Drawing all action to resolve non-compliance
requirements which impact Awarding into a continuously updated plan and monitoring
Bodies in terms of how we operate, the progress transparently
qualifications we can offer and the cost • Monitoring policy announcements and
of supporting them consultations from our Regulators
- Ofqual Consultations on accrediting
qualifications, the qualifications and credit
framework and guided learning hours July-
October 2014
Failure to improve retention rates in H P 5 • Effective Retention Strategy to deliver against
both CMI and IC will lead to more clear target in all customer groups and with
members leaving impacting the accountability clearly set
achievement of key business objectives • Continuously monitoring performance and
monthly reporting to ELT and subsequent visibility
to the Board
• Continue to promote direct debit as it is clear
that the retention rate is higher with this payment
method
RISK MANAGEMENT
Quarterly Update
• Full compliance confirmed to Ofqual,
Welsh and Scottish regulators in June
2014 including on all issues raised by
Ofqual in previous year
• Ofqual have not yet confirmed the
"autumn inspection" they warned us to
expect as part of their regime for all
awarding bodies but we are ready to
respond if and when called.
• All education providers now visited by
current quality manager team leading to
increased sanctions and some
withdrawals when deficiencies found
• Ongoing risk based quality assurance of
Policy, process and operations and
responding quickly and fully to any
incident/issue arising
• Clear structure and focus in Awarding
Body and "wall" in place between sales
and operations to ensure compliance
focus is never compromised
• Regulatory Compliance Committee
established as Governing Body and
expertise being strengthened by
increasing to 9 members and continues to
provide expert insight and rigorous
challenge
• Responding to Ofqual Consultations and
work in progress to develop options and
action depending on their outcome
including review of Awarding Body
Strategy informed by the success and
outstanding challenge of 2014 to date.
• Clear KPI targets set for retention which
are measured monthly
• “Recharging Membership” a Growth
Strategy initiative strand shared by
Narinder Uppal and Steve Heappey
• Further improvement in both customer
satisfaction and retention through first half
of 2014-15. At end September, retention
for CMI at 88, is 2 points better than
target and 3 points up on last year and IC
at 86 is 3 points better than target and
previous year.
Net Risk
Person
Further Action Required 1 - Lowest
Responsible
9 - Highest
• Status now business as usual and Steve Heappey 4
monitoring current and any new risks
identified in our operations - Net rating
cannot reduce below 4 as whilst our
action through 2013/14 now makes non-
compliance unlikely, were it to happen
then the impact and consequences are
high - Continue to strengthen systematic
assurance
• Further regular EP visits and monitoring
and ongoing risk based quality assurance
activity
• Building understanding of likely
regulatory changes including Ofqual's
2014 Consultations through lobbying,
professional groups and ongoing
announcements to inform Strategy and
be ready to respond to any changes
when they are made
• Now achieved minimum net rating as Steve Heappey 4
whilst likelihood has been substantially
reduced through our action and various
initiatives, the impact would still be high
were retention to suddenly reduce.
• Strong monitoring and now publishing
performance on Website (from October
2014)
• Will continue to develop improved
services and new initiatives to improve
customer satisfaction and retention
• Continuing to promote payment by
direct debit
BUSINESS RISK MANAGEMENT December 2014

RISKS RISK MANAGEMENT

RISK IDENTIFIED IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY

BUSINESS RISK AREA

STRATEGIC OBJECTIVE Gross Risk Net Risk

Impact Likelihood Person
1 - Lowest Quarterly Update Further Action Required 1 - Lowest
H/M/L U/P/L/C Responsible
9 - Highest 9 - Highest

Effectiveness of Service-led
Customer Relationship
management in Awarding Body
Realign Sales & Marketing to
grow employers and EPs
• Reduction in income from education
providers due to:
• The service delivery team not
achieving their service and/or
commercial targets
• Significant competitive price and/or
product pressure
• Operational and business support not
meeting customer requirements
• Economic factors including reduction
in public and private spending
H P 5 We have moved all but HE customers of our
Awarding Body into a service rather than the
previous sales-led relationship model as we
believe this more closely meets customer needs
and will bring greater sustained success
• Fuelling what was successful in the first
half of 2014/15 we are expanding the
service team to increase relationship
activity and take on from Sales the
recruiting new education providers
• Our MoD Account Manager and new
National Key Account Manager
transferred from Sales to Service Delivery
in September 2014
• Service and commercial sales targets in
place for all teams with strong cross
organisation support through "Fight-back"
and other internal programmes
• Re-engaging with national key accounts
who have mostly been left untended for
up to a year leading to many reducing
registrations with us
• Continuing focused and upweighted
management of all MoD accounts
including maximising return from our new
Navy contract and Army funded training
offer
• Transparent and regularly reviewed
performance monitoring
• Improved sales performance monitoring
• Building customer insight and
responding quickly to emerging new
requirements
• Recruiting and establishing additional Steve Heappey 4
team members
• Quickly re-engaging with our 99 key
accounts and responding to emerging
issues/needs
• Continuing to improve our offer,
engagement and operational and
business development support to retain
and grow business and build competitive
edge
• Recruit significant number of new
education providers to build back our
network and sustain future growth
• Review our qualification offer ,
promotion and support - particularly at the
faster growing levels 2&3 and
NVQ/Apprenticeships

Service Enablement
replacing previous ICT
Capability risk
Create digital routes to market
• ICT Hardware and Software not
adequate to meet current and
foreseeable business needs
• Operational processes not efficient or
fit for our new purpose and system
functional requirements not clear
enough in the business
• which has seen traffic decrease since
New digital products not yet developed
for web based transactional sales
H P 5 • Approved and funded business led and
prioritised SEG programme has delivered step
change in improved infrastructure
• Introduced measures and controls to ensure
operational delivery of clear and authorised
business requirements
• Established approach, process and resource to
transform business processes through LeanCMI
• Our telephony development with • Further upgrading to virtual server Steve Heappey 4
Liveops was delivered in October 2014 network and fibre bandwidth at both
completing the transformational "SEG" Savoy Court and Management House
first phase programme • Continuing "system exploitation "
• Whilst new development requirements programme including increased user
are inevitable as the business grows and training
changes, current focus has moved to
exploitation including on our new website
launch
• New registration module launched on
our Hub system producing great
customer feedback
• Server virtualisation and "fundamentals"
work complete
• Business intelligence reporting
resources increased and LeanCMI
process programme mainstreamed into
our strategic initiative programme
BUSINESS RISK MANAGEMENT December 2014

RISKS RISK MANAGEMENT

RISK IDENTIFIED IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY

BUSINESS RISK AREA

STRATEGIC OBJECTIVE Gross Risk Net Risk

Impact Likelihood Person
1 - Lowest Quarterly Update Further Action Required 1 - Lowest
H/M/L U/P/L/C Responsible
9 - Highest 9 - Highest

Business Continuity Inability to provide appropriate level of
service to all customers and
stakeholders - business continuity
H U 4 • BCP updated to ensure it reflects best practice
and current structure
• Responsibility for BCP and IT transferred to
Service Delivery directorate to reflect inter-
dependence
• New robust virtualisation solution in place with
local failover system replication and automated
remote (CMI Savoy Court office) replication for
offsite recovery
• Business Continuity Plan approved by
leadership team, welcomed and noted by
Finance & Audit Committee, satisfied
Internal Auditor who has closed long-
outstanding recommendations
• Business Continuity
Plan reviewed and approved in BSI audit
on 19/6/14
• Continue BC Plan testing through Steve Heappey 2
planned rolling programme across all
business functions - there has been an
increased focus on the ability for
individuals / complete departments to
work from home in the event of a disaster
situation enabled by improved remote
access (ability to link to CMI systems via
web based interface) and the recent
introduction of cloud based [LiveOps]
contact centre (initially Customer Services
and Sales) - Already tested for several
individuals and one complete department
(Digital Delivery) - More tests planned
late October through to early 2015 -
currently testing of using LiveOps to
communicate with all or selected groups
(e.g. London staff, Corby staff, all senior
Managers, particular dept. etc.) by
simultaneous email and SMS messages
giving clear instructions / update in any
emergency
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
FINANCE & SUSTAINABILITY
Adequate Financial Reserves
Pension Deficit Funding
Cashflow
December 2014
RISKS
RISK IDENTIFIED
Impact
H/M/L
Reserves Cover falls below the
minimum level of 3 months
Contributions to the Defined Benefit
Pension scheme become unaffordable
such that cash reserves are depleted
and the Institute is unable to fund its
future strategy
The net cash inflows generated from
trading activities are insufficient to
cover the cash outflows in respect of
the pension contributions, development
and capital expenditure.
IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Likelihood
1 - Lowest
U/P/L/C
9 - Highest
H P 5 The reserves cover was at 108% of its target (6
months of charitable expenditure) at 31 March
2014. "Excess" reserves will be used as
appropriate, and with the approval of the Board of
Trustees, to support the continuing delivery of the
Growth Strategy.
H L 7 The 2013 triennial valuation resulted in a 12 year
recovery plan, with annual deficit contributions
starting at £0.8m from 1 April 2014, and rising by
RPI each year.
The deficit contributions are deemed affordable in
the context of the current Growth Strategy.
H P 5 The 2014/15 budget anticipates an increased
cash inflow of £0.37m after payment of the £0.8m
pension deficit contribution.
There is a £2M overdraft facility in place with
Barclays Wealth.
RISK MANAGEMENT
Net Risk
Person
Quarterly Update Further Action Required 1 - Lowest
Responsible
9 - Highest
• At 30 September 2014, the level of • We will continue to monitor the monthly Simon Newlyn 4
reserves cover stood at 7.2 months, level of reserves cover but, with the
comfortably in excess of the target level possible exception of volatility in the value
of 6 months of the investment portfolio, do not
envisage any circumstances which would
cause the level of reserves cover to fall
sharply in 2014/15
• The annual contributions of £800k • The implications of the recent Budget Simon Newlyn 5
(increasing by RPI each year) started on changes to pension provision on the
1 April 2014, and include an allowance for operations of the DB scheme continue to
scheme expenses be assessed
• The 2014/15 PPF levy was originally
invoiced at £141k but, after a challenge of
the D&B score, has been reduced to £60k
(lower than the previous year)
• The investment portfolio has been
restructured, with £4m now being
managed by Standard Life (the balance
remains with Scottish Widows)
• Cashflow remains in line with budget • We maintain strong controls over the Simon Newlyn 4
and, despite the seasonal dip in cash cashflow - daily bank balance monitoring
inflows in August, no further drawings is carried out by the Finance Dept
were made upon the overdraft
• The bank overdraft was repaid in Q2 in
line with the cashflow budget
BUSINESS RISK MANAGEMENT
RISKS
RISK IDENTIFIED
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
Investment Portfolio Reduction in the value of the
Investment Portfolio
Insurances Failure to provide adequate insurance
cover for the Institute
Retaining Key Staff Skills Departure of Key Staff leads to loss of
specialist knowledge and skills and
creates business disruption
Staff Continuity High Staff Turnover leads to lack of
continuity and high replacement costs
December 2014
IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Impact Likelihood
1 - Lowest
H/M/L U/P/L/C
9 - Highest
H P 5 The Investment Strategy is determined by CMI in
conjunction with its Investment Managers and is
based upon a "moderate" level of risk. The
Investment Managers maintain their belief that
the portfolio will deliver growth in the longer term.
H U 4 The Institute engages an insurance broker, Sutton • General insurances in place with effect
Winson, to act on its behalf. They provide expert from 1 April 2014 based upon the current
advice, including a comprehensive review of the business and asset values
portfolio, prior to renewal on 1 April each year.
The policies extend across all areas of activity,
including public liability and Trustee indemnity. All
aspects of the Institute's operations are also
covered, including its buildings and contents, IT
equipment etc. The level of cover has remained
constant and consistent over many years.
M P 5 Capabilities of individual staff re-assessed as part
of the updated skills audit to ensure individuals
are matched to the most appropriate roles.
Annual salary increase of 2% implemented in
April 2014, and salaries are benchmarked (and
adjusted as necessary) based upon skill sets
required for key roles.
Skill gaps identified and external recruitment
takes place where appropriate.
M P 5 Monitor and benchmark staff turnover levels as
part of a set of L&D KPIs.
Salary bands set by grade and reviewed against
"market rates".
Strong PDR ethos and commitment to IiP Gold
standard.
Improving trend in employee engagement
measured by annual surveys.
Formal exit interviews carried out to identify
reasons for leaving and potential areas for
corrective action.
RISK MANAGEMENT
Net Risk
Person
Quarterly Update Further Action Required 1 - Lowest
Responsible
9 - Highest
• The Board of Trustees voted against • The investment portfolio performance Simon Newlyn 4
adopting the Charity SAA portfolio continues to be monitored against
structure in July 2014 benchmarks including overall stock
• The value of the portfolio fell back in market indices
October in line with the falls in the major
Stock Market indices - it is currently close
to its opening value on 1 April 2014 of
£5.42m
An 'asset register' detailing the areas of Valerie Hamill 2
cover and the sums insured is maintained (Secretariat)
by the Secretariat team - it is updated
during the year, with significant changes
notified to the broker
• Recruitment taking place to "feed what • New National Sales Team Manager in Simon Newlyn 5
works" - extra resource provided to place and is focussed on the growth of
support partnerships development the employer pipeline - new field and
• Bonuses (both individual and corporate) inside sales staff recruited to deliver Q3
offered based upon sales performance - and Q4 sales targets
incentives (individual and team) offered to • External consultant skills utilised for
a high number of customer-facing staff Insight and analysis
• New National Sales Team Manager plus
additional field and inside sales staff
recruited during September/October 2014
• £0.1m sales bonuses paid out in first
half year to high-performers
• Staff Engagement Day held on 1 • Continued employee engagement Simon Newlyn 5
October 2014 to celebrate half-year through monthly Staff Briefings, the Staff
performance - workshops based around Council, and regular staff surveys
improving communications • Annual Staff Survey carried out in
• Rainbow Rewards programme November 2014 - target to increase
(quarterly and instant rewards) remain in employee engagement measure by a
operation further 10%
• Significant recruitment during
September/October to support the Growth
Strategy (particularly Partnerships) -
further "churn" in the sales teams
BUSINESS RISK MANAGEMENT
BUSINESS RISK AREA
STRATEGIC OBJECTIVE
Governance
Financial Control Environment
Value for Money Procurement
Implications of Bribery Act 2010
December 2014
RISKS
RISK IDENTIFIED
Impact
H/M/L
Non-compliance with Charities Act,
Company Law and other legal and
regulatory requirements.
Code of Conduct Issues - Due process
in handling member complaints leads
to legal challenges
Weak budgetary control and financial
reporting
Inappropriate use of charitable funds in
the procurement of services including
expenses
Failure to prevent bribery which carries
an unlimited fine for organisations or
imprisonment for officers or employees
involved in bribery
IMPACT ANALYSIS CURRENT RISK MITIGATION STRATEGY
Gross Risk
Likelihood
1 - Lowest
U/P/L/C
9 - Highest
M P 5 Activities subject to scrutiny by Board of Trustees,
Finance & Audit Committee, External and Internal
Audit. Strong Board and Committee selection
criteria and process in place. Evaluation of Board
performance carried out annually.
Member complaints process kept under review,
with quality assurance in place with the
Complaints & Investigations Committee.
H P 5 Current budgetary control and financial reporting
subject to both internal & external review on a
regular basis. The Finance & Audit Committee
remit has been broadened to include greater
review of the financial planning and performance
of the Institute.
M P 5 The procurement approval processes are detailed
in the Financial Regulations and Delegated
Authorities documents, both of which have been
reviewed by the Finance & Audit Committee and
the Internal Auditors.
M U 2 The organisation has a strong governance and
control environment, supported by both internal
and external audit. CMI operates mainly in the
UK, with defined contractual relationships with
many of its key suppliers and customers.
RISK MANAGEMENT
Quarterly Update
• Outcomes of the 2014 Board evaluation,
including learnings, actions and
recommendations, continue to be
progressed
• Timetable developed for approval of the
Chartered Management Consultant
award - Steering Committee in place
• Complaints handling process seen as
robust, with quality control measures in
place
• Baker Tilly have performed the internal
audit fieldwork based upon the 2014/15
Audit Plan approved by the Committee
• The audit programme includes a review
of General Ledger and Budgetary
controls as proposed by the external
auditors, BDO, at the July meeting
• There are strong approval procedures
with regard to entering into supplier
contracts and we are currently trialling a
new PO system with selected
departments
• Strict cost controls remain in place
which seek to limit current supplier
commitments to value added expenditure
which is aligned to the requirements of
the Growth Strategy
• Business Gifts and Hospitality Policy for
employees on the CMI intranet
• Anti-bribery policy re-iterated to staff via
CMISpace (intranet)
• Discussions took place with BSI - it was
agreed that their product solution is not
appropriate for CMI, but there was more
general guidance provided
Net Risk
Person
Further Action Required 1 - Lowest
Responsible
9 - Highest
• Impact of pronouncements from Charity Valerie Hamill 2
Commission reviewed and assessed (Secretariat)
• Virtual "Sounding Board" in place for
Management and Leadership
Development - its progress and operation
to be reviewed
• Complaints handling process kept under
review, with disciplinary cases reviewed
to identify lessons learned
• Internal Audit programme includes a Simon Newlyn 5
Follow Up audit, results of which will be
made available to the Committee - as
noted previously, the number of
unresolved Follow Up items was
significantly reduced in 2013/14
• Ongoing review of VAT treatment of
subscriptions - no indication of any issues
being raised by HMRC (most recent VAT
Inspection took place in April 2014)
• We continue to implement strong Simon Newlyn 2
authorisation controls over supplier
commitments
• Roll out of PO system following
successful trial
• Anti-bribery monitoring procedures to be Simon Newlyn 1
maintained, supplemented by a 6-monthly
declaration requested from Directors and
senior managers
 Risk Assessment Matrix

Impact/Consequence
Low Medium High
1 2 4
Unlikely Low Low Medium
2 5 5
Likelihood

Possible Low Medium Medium

4 6 7
Likely Medium Medium High
5 7 9
Certain Medium High High

Likelihood
Unlikely Very unlikely to occur - less than 5% chance of occurrence in amy one year
Possible Likely to occur in the medium term - 10-25% chance of occurrence in any one year
Likely Likely to occur in the shorter term - 25-50% chance of occurrence in any one year
Certain Almost certain to occur, could happen now - 50-100% chance of occurrence in any one year

Impact/Consequence

Minor delay, inconvenience or impact. Very short term effect. Little damage to business,
Low significant financial cost, media interest or reputational damage

Significant impact on customer service, operational function or finance. Medium term effect
Medium with possible media interest or reputational damage

Major impact on customer service, operational function or regulatory compliance.

High Reputational damage, mid to long term effect. National and international media attention

1-2 Note and monitor risk. Management action possibly not required
4-5-6 Management action required. Monitor risk
7 Significant and urgent management action required and regular reporting
9 Extensive and ongoing management action and reporting required