Providing a qualitative research study into how various multinational organisations have responded to these challenges. Four important findings are stated as follows:
1. The boards of big organisations do not fully understand the risks that they are running...
or how the knock-on impacts can spread across risk categories. This in turn makes it harder to manage organisations within their risk appetite.
2. Checks and balances at the board level are critical.Does the board have people with enough industry expertise to ask tough questions about executives’ decisions? In many cases the answer is no. Even the most sophisticated approach to risk can be undermined by a lack of industry insight.
Information moves instantaneously around the world, and opinion morphs into accepted ‘fact’. So corporations must hit the ground running with the right responses delivered at pace. All too often, they are caught unprepared.
There is frequently a gap between what management says about risk and what it does. Are the CEO and board setting the right behavioural example and risk-aware culture, in line with the corporation’s strategy? Do rewards encourage risk-based thinking and behaviour?