How board of directors software can help manage risk
Boards are under increasing pressure to ensure that risk management policies are in line with their businesses’ risk appetite and profile. Thanks to international economic uncertainty and rapidly developing technologies, boards must now ensure that risk management strategies operate effectively to protect their companies from experiencing unnecessary harm.
In overseeing risk management, boards can ensure that companies are fully engaged with risk supervision and prevention and that policies are on par with company-wide strategies. Risk mitigation is complex to navigate, so boards must use every arsenal available to them to effectively manage it; fortunately, board of directors software is proving to be an effective tool in corporate risk management.
The board of directors’ responsibilities regarding risk management
In the past, corporate boards have had a more ‘hands-off’ role when it comes to managing risk. However, past events have changed this, and board meeting agendas now allot time to discussions surrounding risk management.
Board directors now need to be more engaged with risk management than ever and ensure that companies are aware of and appropriately reacting to threats that could appear. Board of directors software eases the burden by allowing directors to easily review previous and current company strategies, ensuring that the business is alleviating risk. Moreover, boards can instantly sign off new policies and receive updates on potential risks through one platform.
What are the main risks for boards to be aware of?
There are many areas of focus for boards when it comes to risk management, the most prominent of which are listed below:
Cybersecurity
As virtualization develops, cybersecurity risks are becoming more prominent all around the globe. Businesses in every industry are developing staunch responses to digital security threats, spending around 10% of their annual budget on cybersecurity protection.
The main risks that affect companies regarding cybersecurity include the following:
Phishing attacks
Ransomware
Malware
Unreliable software
Insider attacks
Unintended disclosure of confidential information
Financial
Boards need to look ahead and consider current the current economic climate when developing strategies.
Some of the financial areas in which boards need to oversee risk include the following:
Property losses
Personnel losses such as en masse resignations
Profit losses due to increased expenses and the economy
Fines due to non-compliance
Legal expenses stemming from risk mismanagement
Insufficient economic reserves
Strategic
Aligning with corporate strategy is a large part of the board of directors’ responsibilities regarding risk. Boards need to ensure that companies are developing strategies that align with overarching business goals and values, as well as considering ever-changing risks that arise due to current global events.
Strategic risk could stop a company from being able to properly implement a new strategy. Therefore, employee compliance and ensuring that personnel are aware of risks and know how to avoid them is integral. Boards should be engaged in risk avoidance from the outset so that it becomes embedded in corporate culture.
Some examples of strategic risk include the following:
Failing to adapt to current circumstances and falling behind competitors
New industry compliance regulations that threaten the way you do business
Events that cause business leaders to lose focus on following the company strategy
Inadequate governance practices
Reputational
One of the most unpredictable areas of risk is reputational risk. Damage to a company’s reputation can lead to revenue loss and stock prices nosediving. The main causes of this type of risk include the following:
Unpopular company actions
Unethical employee actions
Negative or inappropriate behavior from company partners
How board of directors software can help tackle security risks
All risks listed in the above section can be mitigated with prevention and actionable responses. Board members need to be involved in assessing, preventing, and responding to risk. A way in which they can do so is by using software.
With board of directors software, board members can remotely monitor and alleviate risk through one platform, without needing to physically meet up to discuss pressing matters should they ever arise; instead, they can conduct online meetings to talk through issues.
Directors can also view documents, sign off on new risk management policies, and make notes for upcoming board meetings using the software. Moreover, important documents can be safely stored. With a variety of security measures in place, important board information will always remain secure.
Mitigate risk with BoardWorks
BoardWorks is the board of directors software solution from Computershare. Built with busy board members in mind, our software tool is available in both desktop and app form. You can share sensitive documents, sign off on new policies, and store sensitive information related to your business risk using a secure platform.
Computershare invests millions of dollars in security solutions every year, meaning you can rest assured that your board information is safe on our platform. Moreover, our company employs more than 14,000 people, ensuring you can always reach a real person if you have a question or issue regarding the BoardWorks platform.
To schedule a demo of BoardWorks or find out more, contact a team member today .