Tackling risk and spotlighting strategy
Companies today are pursuing new business models for growth, many of which are anchored on emerging technologies and what they are making possible. But these new territories for companies are often rife with new risk. Board discussions about strategy inevitably lead to discussions about risk, and vice versa. That’s because the two are intertwined. And boards recognize the importance of both.
Boards are focused foremost on strategy
Nearly four in five directors want to spend more time on strategic planning next year. This after 59% said their time spent on strategic planning increased last year. Directors often want to understand how management devises the company’s strategy, and boards have high expectations about getting the right information from management so they can provide effective strategic planning oversight. Nearly three-quarters (71%) of directors are happy with information management provide about customer satisfaction data, but 29% are either dissatisfied with or don’t receive any information about competitor initiatives and strategy.
Directors and CEOs have different perspectives as to who influences company strategy
Both say customers and clients and industry competitors and peers have the most influence. But 33% of US CEOs believe the media is influential, compared to 25% of directors. Directors think providers of capital are more influential than CEOs do: 86% say they have at least some influence, whereas only 75% of CEOs agree.
Directors are getting their arms around risk oversight
Just about 95% believe their board understands the company’s risk appetite at least moderately well. They’ve made significant strides in allocating risk oversight: 80% of directors now think there is a clear allocation of risk oversight responsibilities between the board and its committees, up from 63% a year ago. Nearly three-quarters of directors took action to reduce fraud risks during the last year. And 60% say they want to spend more time on risk management in the coming year.