Risk Analysis & Stakeholder report Risk Analysis Ifa Lethu Foundation has a stated goal of producing an Annual Integrated Reporting system. To this end the Foundation engaged specialist advisory from the University of Pretoria to assess the organisation, its business plans and implementation methodologies. This year’s report is the first step in that direction. We include some of their findings. The integrated reporting proces An integrated report, like financial statements, is the result of certain activities that took place. In the case of integrated reporting these activities relate to the way in which an organisation executed / and are planning to execute strategy. An organisation’s strategy is dependent on the way that it does business (i.e. the business model), the environment in which it operates and the vision and goals of the organisation. The board is responsible for formulating strategy, and the future success of the organisation is dependent on how robust these 16 Ifa lethu annual report 2012/13 strategies, are given the skills of the employees and the resources available to the organisation. A major shift of integrated reporting versus traditional reporting is the fact that integrated reporting focuses on long term value creation, and forward looking information, therefore, becomes very important. It also follows that the number of variables that have to be taken into consideration increases as the time horizon increases. The needs, interests and expectations of a wide variety of stakeholders have to be taken into consideration when long term value creation is considered. The radically changing natural and social environment in which organisations operate will also have a major impact on long term value creation. The Ifa Lethu integrated reporting journey The need exists within Ifa Lethu to tell its story to all its stakeholders. What makes the Ifa Lethu story unique is that it cannot translate the value that it creates through a normal annual report, because that simply will not reflect the value that it creates. It needs a medium that can link the social value with the financial results.The future viability of an organisation is thus dependent on the strategies that the board adopts in reaction to the different variables that might impact the organisation. Curent Risks Risk Name Root Cause Consequence Current Controls Leadership Lack of a succession plan Contravention of King II This role requires a leader with vision, a deep belief in the objectives of the Foundation and the ability to raise funding from individuals and organisations across the globe. It also, currently, is a combination of CO and CEO as Dr Ramdhani fulfils all the ‘exco’ responsibilities. A succession plan is in place. Roll out succession Plan in 2014. Security Lack of a secure environment for the art collections, including travelling exhibitions Safety of a national collection is in jeopardy Security for an irreplaceable Collection of artworks is an ongoing concern. Additional concerns are for the safety of works being transported for exhibition across the world and while on exhibition. Necessary security mechanisms and structures in place. All areas of concern covered, including travelling insurances. All structures in accordance with international standards and requirements. These controls are a deterrent but not a guarantee. Report to be prepared by August 2014 Funding Absence of a Fundraising Plan/ strategy. Failure to align strategy to changing environment. Failure to raise confidence levels of potential funders. Absence of ongoing stakeholder engagements. Changing funder priorities Entity will no longer be viewed as a going concern. Lack of sustainability. Unable to fulfil mandate. Funding for development projects is an ongoing concern. While funders are ready to fund actual projects, administration costs also require funding within the accepted rate of a 35% of total cost. Funding for the current permanent staff, and daily operational costs at Ifa Lethu are a constant struggle. Creative fundraising plan. Good risk management and corporate governance in all the businesses of the entity. Quarterly fundraising reports. Successfull maintenance of confidence levels of funders. Investigate the contracting of an internal or external professional fund raiser to alleviate pressure on the CEO. This will allow CEO to focus on strategy and stakeholder engagements.
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