In today’s evolving business and risk landscape, the board’s need to continuously improve their risk oversight practices and implement an effective and efficient risk oversight function. Board’s need to evaluate which risks are to be on the top of the board agenda and which one is to be delegated to the management team. The Board’s need to continuously assess their governance structure as new risks evolve frequently.
The oversight of a successful risk management program requires proactive engagement from the board. The board should have a clear understanding of the risk appetite of the organization and the impact of disruptive risks on the organization overall.
While evaluating the effectiveness of the organization’s enterprise risk management in terms of disruptive risks, the board’s must consider the following questions to minimize the effect of the risk on the organization:
• The risk governance structure has been clearly defined and responsibilities have been properly delegated?
• Is the management providing the correct information to the board in overseeing the risk management process?
• What policies, processes, and framework have been implemented for monitoring the risk exposure?
• What is the interdependency between the success of the implemented strategies and disruptive risks?
• Are appropriate actions being taken to fill up the gaps and improvement opportunities are identified during the evaluation process?
The board’s need to have the complete risk oversight and understanding of the risk management policies and processes. The board needs to continuously evaluate the risks on top of the agenda. The business leaders must have an appropriate periodical overview of their businesses and make based on future disruptive risks. The tone and the culture of the boardroom can help to identify the emerging disruptive risks. In today’s disruptive business environment the expectations of the shareholder’s are higher and they rely on the management team to have an oversight on disruptive risks. The board’s need to set the appropriate tone at the top to have a proper and clear understanding of the disruptive risk landscape. They need to build a strong relationship with the stakeholder’s who have a direct impact on the organization’s risk profile and have the ability to create value. Whether driven by an unforeseen circumstance, disruptive risks are not going to wait for the boards to follow up. These risks have a great impact on the organization’s sustainability and financial growth. The board members can embrace an adaptive approach to the risk governance structure to help anticipate disruptive risks.
The Board’s need to strengthen their oversight of disruptive risks through:
• Improve the visibility of disruptive risks in the boardroom by improving the content and format of reports from management and information.
• Stay informed about the organizational developments between board meetings.
• Conducting deep dives with the management, on disruptive risks and their implications for the organization’s strategy.
• Templates for incorporating disruptive-risk oversight criteria into board evaluations.
Many organizations across various industry verticals are now adopting an Integrated approach to risk management. This strategic approach enables stakeholders to effectively coordinate and centralize risk management activities across all business functions. Managing risk using an integrated approach provides a better understanding of risk profiles that supports informed and risk-based decision-making. Implementation of Risk and Compliance automation tools like ConfidentG Cyber Risk Governance product suite is an all-inclusive solution to the challenge of continuously changing Compliance and Risk trends. The Agility, Mobility, Security, and Scalability that such cloud-based solutions provider is unmatched and improves overall productivity and efficiency of important Business processes like Risk, Compliance, Audit, and Cyber Governance.
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