MDTFs implicitly represent an element of risk sharing among all stakeholders, can assist in establishing a common understanding of risks, and can provide more efficiently and strategically for risk mitigation and adaptation measures. Risk sharing is a key element of the due diligence and operationalization of the fund, and it is understood that the residual risk is shared among all stakeholders. types of risks contextual, programmatic, and institutional should be considered and provisions – – for the identification, monitoring, tolerances, and risk responses should be considered and vested as part of the fund risk management strategy. Allocation criteria, including thematic priorities and project partner selection criteria, should reflect the fund’s risk management strategy in order to accelerate delivery and increase fund impact, and to ensure that fund operations no harm’ and are used for their ‘do intended purpose. Figure 3: Risk ranking matrix (sample to be adjusted) Consequences Insignificant (1) Minor (2) Moderate (3) Major (4) Extreme (5) Very Likely (5) Medium High High Very High Very High (5) (10) (15) (20) (25) Likely (4) Medium Medium High High Very High (4) (8) (12) (16) (20) Possible (3) Low Medium High High High (3) (6) (9) (12) (15) Likelihood Unlikely (2) Low Low Medium Medium High (2) (4) (6) (8) (10) Rare (1) Low Low Medium Medium High (1) (2) (3) (4) (5) A risk ranking matrix would capture the hierarchy of risk at different levels, allowing an assessment of the most appropriate responses to the identified risks, particularly to those risks most likely to impede success (very high and high). Accountability The provisions are specified in the legal instruments governing the Fund (MOU, MOA and SAA), and ensure a clear understanding with regards to programmatic and financial accountability of all stakeholders in the course of implementation. In addition to specifying the applicable rules and procedures this section can provide for any special arrangements in case the fund includes windows for non-UN stakeholders. VI. Reporting
MDTFs implicitly represent an element of risk sharing among all stakeholders, can assist in establishing a common understanding of risks, and can provide more efficiently and strategically for risk mitigation and adaptation measures. Risk sharing is a key element of the due diligence and operationalization of the fund, and it is understood that the residual risk is shared among all stakeholders. types of risks – contextual, programmatic, and institutional – should be considered and provisions for the identification, monitoring, tolerances, and risk responses should be considered and vested as part of the fund risk management strategy. Allocation criteria, including thematic priorities and project partner selection criteria, should reflect the fund’s risk management strategy in order to accelerate delivery and increase fund impact, and to ensure that fund operations ‘do no harm’ and are used for their intended purpose. Figure 3: Risk ranking matrix (sample to be adjusted) Consequences Insignificant (1) Minor (2) Moderate (3) Major (4) Extreme (5) Likelihood Very Likely (5) Medium (5) High (10) High (15) Very High (20) Very High (25) Likely (4) Medium (4) Medium (8) High (12) High (16) Very High (20) Possible (3) Low (3) Medium (6) High (9) High (12) High (15) Unlikely (2) Low (2) Low (4) Medium (6) Medium (8) High (10) Rare (1) Low (1) Low (2) Medium (3) Medium (4) High (5) A risk ranking matrix would capture the hierarchy of risk at different levels, allowing an assessment of the most appropriate responses to the identified risks, particularly to those risks most likely to impede success (very high and high). Accountability The provisions are specified in the legal instruments governing the Fund (MOU, MOA and SAA), and ensure a clear understanding with regards to programmatic and financial accountability of all stakeholders in the course of implementation. In addition to specifying the applicable rules and procedures this section can provide for any special arrangements in case the fund includes windows for non-UN stakeholders. VI. Reporting