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In the Boardroom: Risk Governance Review

  • Finland

    22-05-2019

    Eversheds Sutherland launches global review of risk in the boardroom – what boards are doing to identify and address risk

    Global legal practice Eversheds Sutherland, in association with forecasting analysts Oxford Economics, announces the launch of its latest board report, with a focus on current threats and mitigation trends in risk governance, where boards see their current and future risks, and how they are structuring their governance procedures to oversee them.

    Corporate board directors are working harder than ever before: new regulations, changing business models, new entrants disrupting markets and cyber risk as well as other emerging risks require rapid responses. At the same time, technological innovation offers many companies a chance at digital transformation, adding urgency to the board’s strategic mandate.

    Eversheds Sutherland’s Risk Governance Review went into the boardroom to ask approximately 400 board-level directors - What risks were top of mind for them? How do successful boards stay on top of these risks while remaining agile? And what can all boards do to adopt best-in-class governance practices?

    Aleen Gulvanessian, Head of Boards and Governance, Eversheds Sutherland comments:

    “In this new age of corporate risk, our findings are that boards are looking at risk harder than ever, with many directors telling us that all board decisions are reviewed through the lens of risk. Well performing boards do not approach risk as a “tick box exercise” and the most effective boards, when looking at strategy, are indirectly thinking about risk. Cyber risk has climbed to the top of most companies’ worst fears but, despite the risks of climate change and artificial intelligence being very high on the news agenda, they remain low on board agendas.

    “We found that, whilst there is no single or infallible way to oversee risk, those who believe they have a visionary CEO were particularly comfortable with the lens through which the board addresses risk, for example when a company is reinventing its business model before the competition gets there first.”

    Ian Gray, Executive Partner, Clients, Eversheds Sutherland comments:

    “Against a backdrop of an ever more uncertain global geopolitical climate, boards are adapting their practises to consider risk in a far more strategic way. The agenda keeps changing with new, difficult risks such as digital disruption and automation, and climate change issues.”

    Visit the Risk Governance Review page on the Eversheds Sutherland website for more details.

     

    Methodology:

    Eversheds Sutherland’s In the Boardroom: Risk Governance Review, commissioned from Oxford Economics, sought to gain a deeper understanding of their approach to risk and how their companies structure their operations and governance to mitigate risk.

    In late 2018, Oxford Economics surveyed 350 board directors at for-profit companies, of which 30 served on the boards of privately held firms. In total 46% of respondents came from Europe; 29% from the US; 13% from Asia; 9% from the Middle East; and 3% from Latin America. Industry groups represented include: telecommunications, financial services, pharmaceuticals, food/consumer products, retail, entertainment, transportation, industrial manufacturing, engineering and construction, chemicals, automotive, utilities, hospitality, energy and mining, professional services, aerospace, technology, healthcare, agribusiness, and industrial products. All companies had annual revenues above USD 250 million, with 58% having revenues above USD 1 billion.

    Additionally, Eversheds Sutherland conducted 50 anonymous interviews with clients; quotes from those interviews are identified by the individual’s position and industry sector or location.

    Disclaimer

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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