We’re living in an era of unforeseen risks. While a company can’t always anticipate what might be around the corner, strong risk oversight by the board can help the company respond with more organization and agility. The number of risks the board oversees continues to grow, even as the nature of those risks is changing and they are becoming more interconnected. The probability and impact of these risks also continues to shift, with some risks just affecting a certain area of the business and others severely impacting the overall brand.
We’ve certainly learned that we all need to broaden our risk thinking, recognizing that some things we thought could never happen might, in fact, happen. This requires more skepticism when preparing for the future—a skill that the board typically has more experience with than management. Taking a long view on risks aligned to the strategic plan at the board level allows company leadership to focus on day-to-day management of those risks.