Adaptive governance is a framework for analyzing and monitoring the financial, social and operational foundations of the multilevel governance models that are successful in building resilience for the challenges posed by the ever-changing risk landscape. When it is possible to have an insight over the disruptive and ever-changing risk landscape, board members can aid in the management to look around the corners. With the active involvement of the board members, they can guide towards the ways for improving the resiliency of the organization towards disruptive risks. Adaptive governance will be beneficial to organizations of all sizes and sectors. It includes more effective oversight of disruptive risks and high performing board rooms.
The threats and challenges posed by disruptive risks have the potential to affect the long-term sustainability of an organization. The governance committee should consider ways to incorporate the ways to include disruptive risks in the boardroom discussion for effective and proper allocation of responsibilities. Ensuring that enterprise risk management processes are effective and that they capture disruptive risks.
To strengthen Adaptive Governance, boards need to consider the following aspects:
- Boards need to identify the aspects to improve the board culture that helps the organization to identify and manage disruptive risks. The board needs to be open for discussions and ideas, should be willing to put up questions from self and answer those from others, sharing the information with the management about potential problems.
- Board’s should start investing in the skills to manage and mitigate disruptive risk effectively and efficiently. The selection criteria for the management should include the assessment of the leadership qualities in an environment of disruptive risks. The organization’s talent strategy should reflect a proactive approach to the right skills and structure to manage and mitigate disruptive risks effectively and efficiently. Board diversity is a strategic imperative and not a compliance issue.
- Boards should enhance operating processes that contribute to better situational awareness in the boardroom. Improve the visibility of disruptive risks on the board’s agenda. The risks reports providing information about the changing business conditions and potential risk and opportunities in a format that enables proactive decision making. Board and management should deep dive on disruptive risks and their implications on the organization to generate long-term sustainable value.
Whether come from inside or outside of the organization or they are driven by unexpected circumstances disruptive risks won’t wait for the boards and the management teams to catch up. Implementing Adaptive Governance will not avoid these disruptive risks but will better position the organization to manage and mitigate these risks. Strengthening adaptive governance will require changes to boards’ culture, skills, composition, operating processes, and interactions with management. ConfidentG Governance as a Service® takes oversight of disruptive Risks to a whole new level of efficiency and effectiveness. Such applications aid in viewing disruptive Risks across multiple dimensions and various frameworks, thereby making Governance Risk and Compliance a competitive advantage and not just Business Processes which we need to carry you periodically. Automation and Artificial Intelligence can be the key drivers here.
Stay tuned for more posts on Governance, Risk, Compliance and Emerging Technologies. Visit us at our Appexchange listing today at https://cglabs.us/cg_products and get confident with your Governance initiatives.