Strategic decision making in the boardroom
A report published today investigates the role of boards in the risk management of the organisations they lead.
Published by ACCA (Association of Chartered Certified Accountants), Risk and the Role of Corporate Leadership is based on in-depth interviews with thirty FTSE 100 - FTSE 350 executive and non-executive directors along with two focus groups. These included directors from the third sector and SMEs, making the report's findings widely applicable to the business community.
The research was done by Nottingham University Business School's Dr Cormac Bryce; Dr Patrick Ring, Glasgow Caledonian University; and Dr Simon Ashby, University of Plymouth - experts in operational risk in financial institutions.
Risk management and the strategic role of leadership
Organisations cannot exploit strategic opportunities or protect themselves from potential losses or failures without a clear steer from the top on appropriate risk taking, says ACCA.
The report's main findings include:
- some organisations are increasingly aware of the strategic benefits of risk management, which helps them to exploit opportunities and exceed their objectives
- diversity enables boards to expand their skills and experience in risk; so making them more effective collectively
- boards find it hard to understand and address risk culture within an organisation, due to a lack of guidance and difficulty in connecting culture to organisational performance
- time constraints at board meetings and overly detailed risk reports can distract boards from looking at the bigger strategic picture
Dr Cormac Bryce says: ‘The presence of risk diversity on a board, those skills, knowledge, expertise, education and training around risk that ensure a board remains risk intelligent, is crucial to effective strategic decision making within the boardroom.’
Risk and the Strategic Role of Leadership is distributed through ACCA's global offices.
Posted on Wednesday 28th February 2018