As the business environment changes, so must the board’s risk oversight. As the pace of change quickens and the stakes for “getting it right” increase, a question arises: Is our board risk oversight process still fit for purpose? A year ago, a joint report prepared by the National Association of Corporate Directors (NACD), Protiviti and the North Carolina State University’s ERM Initiative advanced the view that boards may not be overseeing the appropriate risks and offered suggestions to close the gap. The report highlighted five areas demanding increased board focus: innovation and...
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Most organisations face an uncertain future that will be shaped by a mix of exciting market opportunities and emerging threats. With unrelenting, continuous and disruptive change the norm, board members must ask themselves a fundamental question: “Are we future-ready?” “Future-ready” may strike some as another buzz term. If one can set aside the initial skepticism and take stock of the ever-increasing complexity in the business environment, the term raises an important question when used in the context of the capabilities of a given board and the strategic underpinnings of the company it...
With digitisation fueling innovation and change, two questions arise: Is internal audit adjusting quickly enough to innovate and embrace underlying technologies, and should the board care? In a world of rapid change on almost every front in which organisations must adapt and grow or risk decline and their ultimate demise, everybody faces the same reality — either improve continuously their efforts to contribute sustainable value or be left behind. The chief audit executive (CAE) is no exception. As the risks and complexities companies face change, so do the focus, skill sets and capabilities...
Sustainability reporting is often viewed as an expectations-meeting exercise. However, strong environmental, social and governance (ESG) performance can deliver more sustainable financial performance, lower employee turnover and reduced regulatory risk. We often hear the assertion that corporate leadership is needed to enhance civilisation’s ability to address a litany of critical societal concerns. More often, executives are called on to address environmental, economic and social challenges and enable the general welfare of present and future generations. While this may be a vague assertion...
Below is the full summary, including key takeaways, of a discussion among active directors facilitated by Protiviti during a dinner roundtable at a December 2018 National Association of Corporate Directors (NACD) event. An abbreviated summary of this roundtable is provided in Issue 113 of Board Perspectives: Risk Oversight (available at www.protiviti.com/IT-it/insights/bpro113) and on NACD/BoardTalk (see blog at https://blog.nacdonline.org/posts/sharpening-cybersecurity-acumen.) Much has been written, and important insights shared, on cybersecurity. The threat landscape continues to evolve,...
Much has been written, and important insights shared, on cybersecurity. The threat landscape continues to evolve, and the topic remains significant in the boardroom. But is there anything new to talk about? To gain fresh perspectives on cybersecurity, an important area of board oversight, Protiviti met with 20 active directors during a dinner roundtable at a December 2018 National Association of Corporate Directors (NACD) event to discuss their experiences. Here are some key takeaways from that discussion: Don’t let overinvesting in protection and detection lead to underinvesting in response...
Many companies have management risk committees (MRCs) as part of their risk infrastructure. While not a part of the board, such committees nonetheless can contribute to the board’s risk oversight. The question arises as how to maximise their effectiveness. Whether organised in the form of a designated MRC or a de facto risk committee,1 the use of MRCs has increased over the years.2 That increase is likely due to the growing complexity of the risks inherent in the organisation’s strategy and business model and increasing sophistication of risk management infrastructure. The agenda of the chief...
The latest survey of C-level executives and directors conducted by Protiviti and North Carolina State University’s ERM Initiative on the macroeconomic, strategic and operational risks that organisations face indicates a challenging year lies ahead. Overall, 825 C-level executives and directors participated in this year’s global study, with 55 percent representing companies based outside of North America. As with our prior surveys, the results captured significant uncertainties by industry, executive position, company size and type, and geographic area. Overall, the important message is that...
Disruptive innovation has a clear impact on the half-life of companies’ business models. Industry disruption and digital transformation present a new frontier of opportunity and risk that is shaping — and speeding up — business model changes. A recent global survey of board members and C-suite executives cited the inability to compete with “born digital” competitors, resistance to change and disruptive change to the business model as top risks for 2019. These risks were not at the forefront of many senior executives’ and board members’ minds just a few years ago. To gain perspective on...
Below is the full summary, including key takeaways, of a discussion among active directors facilitated by Protiviti during a dinner roundtable at an August 2018 National Association of Corporate Directors event. An abbreviated summary of this roundtable is provided in Issue 110 of Board Perspectives: Risk Oversight (available at www.protiviti.com/US-en/insights/bpro110) and on NACD|BoardTalk (see blog at https://blog.nacdonline.org/posts/oversight-digital-active-directors). Disruptive innovation has a clear impact on the half-life of companies’ business models. Industry disruption and digital...