Risk - an enjoyable topic?!
Experienced NED and Risk Committee member Nicolina Andall shares why a discussion on risk was so engaging and enjoyable, and the key take aways for all NEDs.
Who would have thought that a discussion around “Risk” and a set of principles-based guidance could be such an engaging and, dare I say it, enjoyable topic? I proffer as evidence the cropped snapshot of a few of the attendees clearly having a great time!
Fiona Hathorn hosted an event on 27 April 2022 featuring Professor Bryan Foss who, amongst a portfolio of roles, is part of the Core Team of the Risk Coalition who authored and published this rich, yet understandable, and applicable paper entitled “Raising the Bar – Principles Based Guidance for board risk committees and risk functions in the UK Financial Services Sector”
Whilst aimed at the Financial Services Sector, the principles can easily be proportionately applied to any organisation that believes in the importance of taking a more mature approach to present and emerging risks
Given the increasing heavyweight importance of Risk Committees and the FRC's support of this publication, I suggest that this publication should be considered essential reading for anyone serious about their personal corporate NEDucation.
Some Key points arising from the engaging presentation and discussion:
- The guidance is designed for the Board, Board Risk Committee, Chief Risk Officer and the Risk function. It’s a set of principles designed to allow an organisation to conduct a “self-check” in respect of their approach to operational risk and resilience.
- Covid has taught us that consideration of new and emerging risks are essential topics to keep front of mind.
- It is imperative that the organisation takes a bespoke approach to risk management that focuses on the long term sustainability of the business (anyone say director's duties?). It is unlikely, however tempting, that a tick box approach to satisfy the regulators is the best way forward for any organisation!
- Take a collaborative approach to Risk and ask your key stakeholders to help you spot risks on the horizon. Use your Board, front line staff, supply chain, market ecosystem etc. to help you identify risk and provide help in the event of a crisis!
- Alternatively…. Go sit in that dark room and brainstorm everything that could go wrong!
- A wise organisation is one that has risk technicians AND a diverse group of people with different cognitive perspectives in the room when discussing risk.
- If you are on your Boardroom journey – consider joining the Risk Committee (I did!). Although the reading is likely heavy it carries the potential of allowing you a 360 degree perspective on the entire organisation (I agree!).
- From a governance perspective – the Audit Committee and the Risk Committee have very different functions. If your organisation is developing in this area – probably start with an Audit committee, progress to Audit + Risk and then finally separate them.
In my humble opinion, an expert is one that makes a tricky topic sound structured, sensible and eminently understandable – I thank Professor Bryan Foss for being that expert.
Listen to Fiona Hathorn and Bryan Foss discussing all things risk in the full podcast recording
Find out more about the Risk Coalition
and for information about future events for current NEDs, check out our events calendar