Risk is a word that board members have been familiar with for a very long time. As part of their duties, boards must identify, measure, and ascertain what levels of board room risk their organization could encounter. In 2018, that has become an exponentially more difficult job than it was thirty years ago.
As Susan C. Keating, CEO of WomenCorporateDirectors (WCD) writes, “The risks around innovation, company culture, and geopolitical changes will continue to make shareholders and regulators press for more accountability on boards—blame is getting pushed upstream, not down, in today’s organizations.”
In recent years, the issue of risk has moved increasingly into the realm of cybersecurity and cloud data protection. Every year, hackers find new ways to breach systems. As a result, companies are scrambling to ensure that they stay ahead of the curve. MHA Consulting believes that 2018 could be the year that AI enters the realm of risk management by making phishing attacks more sophisticated than ever before.
MHA adds, “It can also be used to learn users’ computer behavior in order to improve the hackers’ field position as they go on to mount the familiar brute-force attacks to try to crack insiders’ network passwords.”
The Addition of Compliance Regulation
The introduction of new compliance regulations can always pose serious risk. Rather than leaning away from regulators, directors should work collaboratively with them to ensure that their company is going above and beyond the standards for reporting, transparency, etc.
New data security laws introduced in Europe will be quick to affect many international companies. Board members must be aware of the shifting landscape and prepared to do what is necessary to comply.
With shareholder activism reaching peak levels, it’s important that directors discuss a plan for how to engage stakeholders. That’s regardless of whether they’re friendly or hostile.
As investment firms like BlackRock demand that companies pay attention to environmental and social impact, board members will also have to consider the risks associated with implementing changes or failing to do so.
When it comes to risk, there’s no reason to gamble with your board’s private data. That’s why Directorpoint offers a board management software solution that prioritizes security. You can see our various security measures at the bottom of this page.