CEO Today - December 2022

cyberbreaches, thewar inUkraineand the recent regulatory requirements reinforce the importance of those on the board understanding cyber risk. The chairman, if not already done so, needs to highlight to the board the issue of cyber risk, help set the risk appetite for the organisation accordingly and make sure that there is a cyber security strategy, programme and clarity of accountability to manage the risk to the acceptable level set by the board. Due to the evolving and dynamic nature of cyber risk, it is imperative that the chair ensures the board has ongoing and active cyber security conversations in the boardroom and benefits from regular cyber briefings, a couple of times per year, on the emerging and current cyber trends and risks in their sector. Those that don’t could have their business compromised by a successful attack, leading to big ramifications for their organisation. Not only in monetary cost to the business, such as in disruption to revenue, cost of rectification and loss of critical data, but in the damage to brand reputation and community trust. Think about risk and the opportunity it presents The pandemic, along with the uncertain times we live in today, have exposed the failure of many boards to effectively understand and predict risk. As a result, many organisations have suffered losses or have had serious problems and are in danger of failing or have even gone under. The chairman needs to focus the board not only on properly planning for risk but understanding that effective risk management is not solely about avoiding losses but in enabling value creation through improved business planning, organisational efficiency and enhanced social licence. Effective risk planning can provide a new opportunity, a competitive advantage, to drive long-term business success. It’s up to boards to be at the forefront of identifying, planning and reacting to risk. After all, they are charged to generate the best return from the capital of the company which demands forward thinking and the ability to anticipate the impact of uncertainty on outcomes. Those chairmen who want to preside over a highly effective board to which they add significant value in 2023 must recognise these factors and make them their resolutions for the new year. “It may seem obvious that cash flow is the lifeblood of business. However, distractions during volatile times can take the mind of the board off this important focus. “

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