As we move on from the initial crisis phase, having hopefully weathered the worst of the storm, boards will now be considering the “next” normal: how they improve the resilience of their business in the face of evolving and emerging risks.
When the research was conducted, just a fifth (21%) of those surveyed were “very satisfied” with their board’s effectiveness in overseeing changes to the risk landscape and adjusting their organisation’s risk appetite.
While there are many mechanisms to support more effective board oversight and understanding of the risk landscape, the single most important action is to ensure that the organisation is allocating sufficient time at board meetings dedicated to discussion around emerging and evolving risks. This has never been more critical. Boards will continue to tackle an ever-growing board agenda as they navigate the next normal. Pre-COVID challenges will need to be addressed, as well as new ones brought about or heightened by the crisis.
While it might seem overly basic, time is a precious commodity often overlooked in its importance when it comes to managing risk and building resilience. The survey found the number one request for enhancing oversight was simply devoting more time to discuss both emerging and existing risks, followed closely by setting aside time to discuss scenarios that could threaten the organisation’s business model.
However, time isn’t the only consideration. To effectively define, assess and oversee how risks are managed, it’s essential to have the right cohort of competencies and skills. With a diverse range of issues including supply chain and enterprise resilience, people and workforce and business restructuring in mind, boards should review their current composition and understand what new skills will be required. This goes beyond a simple skill gap assessment and rather transcends into ensuring that strong diversity of background, opinion, thinking style, gender and other factors are also taken into consideration.
As boards navigate the new landscape created by the COVID-19 pandemic, they should consider how to build improved resilience into the evolving risk environment. We must all remember that even if it appears that the waters have calmed, the crisis may not be not over. It is important that boards don’t get a false sense of security when indicators begin to point in the right direction. The many impacts of this pandemic will challenge us as leaders for likely years to come but anticipating headwinds in advance will help us weather the storm.