Key Takeaways:

• Each change to a business represents new strategic opportunities, but those changes also present new potential risk of and to the corporate strategy. Boards need to understand how the executive team approaches risk informed decision making to assess effectiveness.
• Streamlining and optimizing risk management require proper structure, process, and timing of risk assessment and mitigation activities and programs (e.g., insurance, internal audit, product recall, business continuity, cybersecurity, etc.)
• Corporate culture should include enterprise-wide risk awareness to consistently identify and address emerging and rapidly evolving risks (e.g., COVID, Russia, etc.).
• Macroeconomic trends in risk management should be part of regular dialogue with the executive team and include consideration of bringing in leading experts to educate and advise in particular areas of risk.
• Directors should challenge organizations to make appropriate investments in risk management while building incentives for managing rapidly evolving risks.