Risk appetite statement

1. Introduction

1.1 The Board of Governors is responsible for setting and monitoring the University of West London’s risk appetite.  Risk appetite is defined as ‘the University’s willingness to accept risk in pursuit of its objectives. An understanding of risk appetite is part of good risk management and should be embedded in the day-to-day activities and culture of the entire organisation.

1.2 UWL has a responsible approach to risk management, seeking to recognise and manage exposure to risks. The University is committed to ensuring that no unnecessary or unacceptable risks are taken which might expose the organisation or any of its stakeholders (staff, students and visitors) to potential harm or jeopardise the overall achievement of its strategic aims.  However, it is recognised that an overly risk-adverse attitude can lead to failure to maximise opportunities or inability to act decisively in the face of changes in the external environment, which can, in itself, be a threat to long-term sustainability.  

1.3 The University, therefore, takes a responsible and managed approach to risk, recognising key risks and managing those risks through effective implementation of its risk management policy and the strategic risk register.  This risk appetite statement should be read in conjunction with these documents.

1.4 This risk appetite statement describes the broad parameters within which the University considers its appetite for risk is helpful in ensuring that Governors, University managers and staff are all aware of those parameters.

2. Context to the risk appetite

2.1 The management of risk is set in the context of the Strategic Plan Achievement 2023 and is aimed at ensuring that key risks in relation to the strategy are managed effectively but that the University is also able to assess key opportunities.

2.2 The University’s approach is to minimise its exposure to reputational, compliance and financial sustainability, whilst accepting and encouraging an increased degree of risk in pursuit of its strategic aims.  In particular, the University is proactive in seeking opportunities to increase student numbers, develop an academic portfolio relevant to the world of work, develop its estate, increase its enterprise, research and knowledge exchange activities including its academic portfolio.

2.3 The University recognises that its appetite for risk varies according to the activity undertaken and that the risk taken must be commensurate with the potential reward.  Acceptance of risk is subject always to ensuring that potential benefits and risks are fully understood before developments are approved, and that measures to mitigate risk are established.

3. Risk appetite summary and parameters

3.1 The University’s appetite for risk across its activities is summarised with the scale below below:

A scale from 1-5 is a low willingness to take risks, and 6-10 is a higher willingness to take risks.

• Reputation 1-2
• Compliance 1-2
• Financial 3-8
• Quality of education 1-3
• Student experience 2-6
• People and culture 1-3
• Research, knowledge exchange and enterprise 4-9
• Academic partnerships 2-6
• Estates and infrastructure 3-9
• Environmental sustainability 4-8
• Major change projects 3-8

Definitions

The explanations below provide the parameters for appraisal of risks.

Reputation

• It is regarded as critical that the University preserves its high reputation. The University therefore has low appetite for risk in the conduct of any of its activities that puts its reputation in jeopardy, could lead to undue adverse publicity, or could lead to loss of confidence by HEFCE, SLC, OfS, UKVI or other external agency or its stakeholders. 

Ethical standards and compliance

• The University is committed to maintaining the highest standards of integrity, compliance, and ethics. The University has no appetite for any breaches of the law, regulation, professional standards, research ethics, bribery, or fraud. The University in its decision making abides by the Standards in Public Life. 

Financial performance and sustainability

• The University has a sound financial base in terms of annual operating surpluses, diversified and growing income streams and effective control of costs and there is no appetite for risk in terms of activities that would disrupt these. However, the University has an appetite for investment risks which will enable it to further grow its income or other strategic objective. The University will ensure that potential benefits and risks are fully understood before developments are agreed upon and that appropriate measures to mitigate risk are established. 

Quality of education

• The University has robust quality assurance procedures that ensure the quality of the educational opportunities offered to students. It has low tolerance of risks to its provision both in the University and its academic partners. 

The student experience

• The University is committed to further development of the student experience including teaching and learning, facilities and support arrangements. There is generally a low‐appetite for any risks which threaten the delivery of objectives in this area, although it will take moderate risks to invest in new courses and curriculum. 

People and culture

• The University aims to value, support, develop and utilise the full potential of our staff to make the University a stimulating and safe place to work. It places importance on a culture of equality and diversity, dignity and respect, annual reviews, the development of staff, and the health and safety of staff, students and visitors. It has low appetite for any deviation from its standards in these areas. 

Research, knowledge exchange and enterprise

• The University is committed to developing its research, knowledge exchange and enterprise activities. It is prepared to take investment risks to increase its reach and impact balanced with a low appetite for any compliance risks. 

Academic partnerships

• The University is committed to developing its reach through academic partnerships and transnational education. It is prepared to take low to moderate investment risks to increase its reach balanced with a low appetite for any regulatory and quality assurance risk in this activity. 

Estates

• The University is committed to maintaining and improving its estate. It is prepared to take moderate risks to grow and develop the estate balanced by rigorous due diligence and ensuring that the potential benefits and risks are fully understood before developments are agreed and that appropriate measures to mitigate risk are established. 

Environmental sustainability

• The University aims to make a significant, sustainable, and socially responsible contribution to society through its research, education, knowledge exchange and operational activities. It is prepared to take risks to grow and develop the estate to enhance sustainability balanced by rigorous due diligence and ensuring that the potential benefits and risks are fully understood before developments are agreed and that appropriate measures to mitigate risk are established. 

Major projects

• Major change activities are required periodically to develop the University, and to adapt to changes in the regulatory and technological environment and in the nature and conduct of the University’s activities. The University expects such changes to be managed according to best practice in project and change management. The University will ensure that potential benefits and risks are fully understood before developments are agreed and that appropriate measures to mitigate risk are established.

This statement should be read in conjunction with the University of West London risk management policy.