Cairngorms Nation­al Park Author­ity Risk Appet­ite Work­shop — June 2023

A AZETS

Exec­ut­ive Summary

On 26 May 2023, Azets facil­it­ated a work­shop with the Cairngorms Nation­al Park Author­ity (CNPA) Board and Seni­or Man­age­ment. The aim was to define the Board’s risk appet­ite, with 14 attendees present. Each mem­ber inde­pend­ently scored their appet­ite for each risk cat­egory. This inform­a­tion provided an over­all pic­ture of the Board’s risk appetite.

Risk Cat­egor­ies

Before the work­shop, Azets and the Deputy Chief Exec­ut­ive agreed on the pro­posed risk cat­egor­ies. These were derived from the Cor­por­ate Plan:

Risk Cat­egory	Cor­por­ate Plan Link
Nature — Deliv­er­ing Net Zero, cli­mate action and sup­port­ing land man­age­ment practices	A1 – A3, A4 – A9
Nature — Eco­lo­gic­al res­tor­a­tion and spe­cies recovery	A9 – A11, A13
People — Thriv­ing Cairngorms rur­al economy	B1 – B4, B9
People/​Place — Thriv­ing inclus­ive communities	B5 – B8, B10 – B11, C1 – C4, C7 – C8, C10
Place — Sus­tain­able vis­it­or destination	C5 – C6, C9, C7 – C8, C10
Corporate/​Cross Cut­ting — Innov­at­ing new solu­tions: deliv­er­ing green investment	A14 and Her­it­age Hori­zons Programme
Corporate/​Cross Cut­ting — Cor­por­ate functions/​corporate reputation	All

Risk Appet­ite Scoring

Based on work­shop dis­cus­sion and sub­sequent man­age­ment feed­back, the fol­low­ing word­ing is pro­posed for review and approv­al by the Audit Committee:

Risk Cat­egory	Risk Appet­ite	Pro­posed Narrative
Nature — Deliv­er­ing Net Zero, cli­mate action and sup­port­ing land man­age­ment practices	Eager – 43% of par­ti­cipants felt the organ­isa­tion should have an eager risk appet­ite in this area.	CNPA is eager to take risk in pur­suit of these object­ives, recog­nising that it may incur losses in pur­suit of excep­tion­al bene­fits. In doing so, it will act­ively embrace innov­a­tion and change. Any impact on com­munit­ies, how­ever, will be care­fully con­sidered before action is taken.
Nature — Eco­lo­gic­al res­tor­a­tion and spe­cies recovery	Open — 43% of par­ti­cipants felt the organ­isa­tion should have an open risk appet­ite in this area.	CNPA is open to tak­ing risk in pur­suit of these object­ives, with­in lim­its. In doing so it will con­sider innov­a­tion and invest­ment, whilst accept­ing some lim­ited loss may occur.
People — Thriv­ing Cairngorms rur­al economy	Open – 43% of par­ti­cipants felt the organ­isa­tion should have an open risk appet­ite in this area.	CNPA is open to tak­ing risk in pur­suit of these object­ives, with­in lim­its. In doing so it will con­sider innov­a­tion and invest­ment, whilst accept­ing some lim­ited loss may occur.
People/​Place — Thriv­ing inclus­ive communities	Open – 50% of par­ti­cipants felt the organ­isa­tion should have an open risk appet­ite in this area.	CNPA is open to tak­ing risk in pur­suit of these object­ives, with­in lim­its. In doing so it will con­sider innov­a­tion and invest­ment, whilst accept­ing some lim­ited loss may occur.
Place — Sus­tain­able vis­it­or destination	Open – 57% of par­ti­cipants felt the organ­isa­tion should have an open risk appet­ite in this area.	CNPA is open to tak­ing risk in pur­suit of these object­ives, with­in lim­its. In doing so it will con­sider innov­a­tion and invest­ment, whilst accept­ing some lim­ited loss may occur.
Corporate/​Cross Cut­ting — Innov­at­ing new solu­tions: deliv­er­ing green investment	Cau­tious and Open – 36% of par­ti­cipants voted cau­tious and 36% voted open.	CNPA is cau­tiously open to tak­ing risk in this area, where the bene­fits out­weigh the risks and losses are with­in lim­its. Due to the fast-paced nature of change in this area, CNPA will cau­tiously con­sider decisions against the risks to lim­it poten­tial losses.
Corporate/​Cross Cut­ting — Cor­por­ate functions/​corporate reputation	Cau­tious and Open – 43% of par­ti­cipants voted cau­tious and 43% voted open.	CNPA is cau­tiously open to tak­ing risk in this area, where the bene­fits out­weigh the risks and losses are with­in lim­its. This excludes all com­pli­ance-related areas, where CNPA will take a cau­tious approach and ensure that it meets all stat­utory and leg­al obligations.

Risk Cat­egory	Risk Appet­ite	Pro­posed Narrative
Health and Safety	Averse

Next Steps

• The Board should form­ally review and approve the pro­posed risk appet­ites across each of the sev­en areas.
• The risk appet­ites should be com­mu­nic­ated to all staff.
• The appet­ites should be built into the organisation’s risk registers and util­ised to determ­ine wheth­er cur­rent risks should be treated or tol­er­ated, and wheth­er addi­tion­al mit­ig­at­ing actions are required or no fur­ther action taken.
• The appet­ites should be built into Board papers to com­mu­nic­ate the Board appet­ite across the areas being discussed.
• Each of the risk appet­ites should be reviewed and approved by the Board on at least an annu­al basis or where the organ­isa­tion is sub­ject to any sig­ni­fic­ant change in its oper­at­ing environment.

Appendix 1: Risk Appet­ite Definitions

Cat­egory	Defin­i­tion
Averse	Accept no risk / ter­min­ate risk. Act­ively lim­it and avoid risk. Avoid actions with any risk exposure.
Min­im­al	Min­im­ise risk. Accept low level of risk in pur­suit of stra­tegic goals and pri­or­it­ies. Avoid innov­a­tion unless essential.
Cau­tious	Con­sidered risk tak­ing allowed, where bene­fits out­weigh risks. Innov­a­tion gen­er­ally avoided unless neces­sary. Pref­er­ence towards safe deliv­ery mod­els with min­im­al uncer­tainty about benefits/​loss.
Open	Take risk if expec­ted reward war­rants, with­in lim­its. Open to invest­ment and innov­a­tion, with some loss accep­ted with­in limits.
Eager	Act­ively embrace innov­a­tion and change. Will­ing to accept risk/​losses in the pur­suit of excep­tion­al benefits.

Appendix 2: Risk Appet­ite Scoring

The fol­low­ing table provides a break­down of the scor­ing against each risk cat­egory assessed dur­ing the workshop.

Risk Cat­egory	Averse	Min­im­al	Cau­tious	Open	Eager
Nature — Deliv­er­ing Net Zero, cli­mate action and sup­port­ing land man­age­ment practices	0%	0%	29%	29%	43%
Nature — Eco­lo­gic­al res­tor­a­tion and spe­cies recovery	0%	0%	29%	43%	29%
People — Thriv­ing Cairngorms rur­al economy	0%	0%	29%	43%	29%
People/​Place — Thriv­ing inclus­ive communities	0%	0%	14%	35%	50%
Place — Sus­tain­able vis­it­or destination	0%	0%	7%	36%	57%
Corporate/​Cross Cut­ting — Innov­at­ing new solu­tions: deliv­er­ing green investment	0%	7%	36%	36%	21%
Corporate/​Cross Cut­ting — Cor­por­ate functions/​corporate reputation	7%	0%	43%	43%	7%

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