Risk is the possibility that a negative event will happen. Risk management is the process used to plan for these events.
Good risk management means thinking about the things that could go wrong in advance, and putting in place plans and controls that reduce the potential impact of any event before it happens.
The process of identifying risks and deciding if and which plans need to be put in place is best done around the same time as the First Nation's strategic planning.
There are different types of risks that a First Nation needs to consider and manage. This will support the First Nation in achieving its goals.
Under the FAL, First Nations must consider the following risks:
- For-profit Activity
- Loans, Guarantees and Indemnities
- Investments
- Insurance
- Emergency Plan
- Financial Reporting Risks
- Fraud Risks