Risks and Opportunities create pressure points which trigger Board-level engagement with Business Strategy, Enterprise Risk and Compliance Management. Across all industry verticals, Board Directors are grappling with the need to define a robust strategy and implement a plan that can address questions related to Risks and Opportunities in a dynamic and volatile environment. The terminology used to clearly define sustainable Business varies by industry. However, Board Directors and C-suite need to communicate the vision of how the firm will respond to global consumerism, geopolitical and environmental changes, long-term access to basic resources and social change from urbanization and globalization.
Risks and opportunities also have the ability to create pressure points that trigger Board Directors to revisit and invest in sustainability strategies and to address that many executives at leading firms are now allocating time to devise a fully funded, corporate sustainability strategy. As per some of the key findings from NACD 2018-2019 Private Company Governance Survey, a majority of private company directors (80 percent) indicated that it has become extremely vital to understand and identify new risks and opportunities that stem from the disruptive business environment, which is moving at a dynamic and rapid pace. In the light of these challenges, 67 percent of boards are becoming proactively engaged in strategy development, whereas 69 percent are seeking to strengthen continuous monitoring of the strategy execution.
Emerging Technologies, exponential technological change and disruptive threats from competitors have significantly increased the stakes of success in strategy development and execution. Having said that, it is important to take into consideration that many private companies might not have the resources to invest in new technologies or to strategically change business models. With this challenge at hand, private boards must revisit and improve their oversight of strategy. The dynamic landscape implies that past industry experience becomes redundant to serve as an insightful guide, making C-Suite’s job even more difficult.
How can Boards tackle the issue of strategy oversight
To better understand how emerging Risks and opportunities affect growth, boards should not limit strategy development to annual management discussions. Instead, they need to incorporate continuous strategy reviews into management discussions throughout the year. Boards also need to engage with management early on in the strategy process to identify it’s development and how it is adjusted and monitored. The board can consider segmenting the strategic plan into elements that are very well connected with key performance drivers and critical assumptions and revisit those elements throughout the year.
Boards can also consider hiring experts to identify and mitigate emerging Risks in sectors such as banking, mining, oil and gas, power, utilities, and basic resources. Organizations need to respond to sustainability risks and compliance requirements which have a significant impact on a firm’s overall financial performance.
A best practice can also be that of appointing a portfolio manager to identify sustainability market opportunities. Many of the most successful Business strategies have initiated with a commercial thrust co-ordinated by a senior manager.
Developing a Programme Management Office to implement the strategy is also a good way for Risk and Opportunity oversight. For Organizations with a broad range of energy, environment and sustainability activities, successful execution requires a Programme Management Office typically of 5 to 25 employees.
Using Automation alongside Board Engagement for real-time oversight of Risks and Opportunities
Risk, Compliance management and Internal Audit are taken to new levels of Efficiency & Effectiveness with Automation tools like ConfidentG GRC application enabling 360-degree visibility and continuous monitoring. Such applications aid in viewing Governance data across multiple dimensions and various Frameworks. You can track your global Governance, Risk & Compliance data using graphical Visualisations of dynamic, intuitive & interactive Dashboards and create Customized Dashboards as per specific Business requirements for Realtime Reporting. One also gets the ability to share Dashboards with team members & collaborate on them to increase Efficiency.
Risks and Opportunities can be challenging to identify and act upon in the fast-paced, volatile and dynamic landscape. However, when strategic Board Governance is executed alongside appropriate use of technologies like Automation and Artificial Intelligence, it can prove to a competitive advantage where the Organization is constantly on top of the Risks and Opportunities. When insight meets strategic execution, Governance becomes Confident and Competitive.
Stay tuned for more posts on Governance, Risk, Compliance and Emerging Technologies.
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