Publication Tomorrow’s Corporate Governance: The boardroom and risk

Executive Summary

There has been a step change in the focus on risk by boards in the last few years but, with an ever more complex business environment coupled with increasing expectations of corporate behaviour, we believe the board’s risk agenda still needs to evolve.

Whilst risk management is high on the agenda of boards, research into 18 major corporate catastrophes illuminated a new, and to date unidentified and unmanaged, set of risks that were the root causes of these crises. Boards may be blind to some of these key risks or may not understand them as deeply as perhaps they should – and there is powerful evidence to suggest that there is a serious gap in the way that many boards identify and address significant risk issues.

New research points the way forward for boards to achieve a greater understanding and control over strategically important risk exposures in order to achieve greater organisational resilience. It has identified a clear leadership role for the board in determining a strategy towards risk which harnesses the power of the totality of expertise and knowledge within the organisation to support the board and to keep it informed.

This report and tool-kit, the third in a series of outputs from Tomorrow’s Company’s Good Governance Forum, describes this new group of potentially catastrophic risks, what the roads to ruin and roads to resilience look like and what boards can do to evolve their risk management agenda and more effectively govern risk.

“I must start by congratulating Tomorrow’s Company on producing a document that is so concise and readable, yet still manages to capture the most important issues that directors and boards should consider in relation to corporate governance in today’s fast-moving world.”

Dick Olver, Chairman, BAE Systems