Widely adopted management and governance approaches are increasing business risks

Widely adopted management and governance approaches are increasing business risks

Press Release (ePRNews.com) - PETERBOROUGH, England - Feb 23, 2017 - Many management and board practices are creating a higher degree of risk, according to Colin Coulson-Thomas, author of Winning Companies; Winning People. Speaking at the 2017 Global Convention on Corporate Ethics and Risk Management he challenged business leaders and risk managers to consider whether certain approaches and models are doing more harm than good.

As risk is an integral element of business, management and life, Coulson-Thomas asked: “Why is risk management not just management.” He suggested: “The taking of reasonable and calculated risks is at the heart of entrepreneurship. It is essential for innovation and progress.”

The professor continued: “In an uncertain environment, we have come to expect the unexpected. We are no longer surprised by surprises. Do risk management and governance practices need to be refined, or do they have to be re-invented? Where in our changing world is the innovation in our thinking about risk management and governance practice?”

“How relevant are concepts such as vision, mission, values, goals, objectives and strategy in uncertain contexts in which disruptions abound? How useful are practices such as monthly board meetings, corporate planning and annual reporting where change is relentless and intervals between reinventions dramatically shorten?”

“How many boards are truly innovation driven? Is their commitment to innovation rhetoric rather than reality? Do boards only adopt innovations that match existing policies, strategies, values, cultures and capabilities? Would they be prepared to review any or all of these in the light of exciting opportunities created by a disruptive technology?”

“Does risk management have to just be about our problems and those of our companies? Should it also be about what our companies could do to help customers and wider society confront the risks they face? Should it be more about turning challenges into opportunities?”

“How many risk management professionals have been held to account for the products that threatened to explode and bring down the international financial system? Were they looking the other way? Did they know and understand the risks that banks were running? Did their warnings not reach bank boards? Should they have persisted and ensured their messages got through?”

“The focus of some professionals is too often upon themselves and the needs of their firms rather than upon ethical and responsible conduct, their clients and wider society. Too many professionals have become a vested interest, advocating changes, approaches and practices that create more work for themselves and impose additional requirements and extra costs on others.”

Coulson-Thomas has championed more cost-effective approaches: “Performance support represents an affordable, quicker and less disruptive approach to high performance and the simultaneous delivery of multiple objectives. It could end traditional trade-offs between risk and return. As well as enabling people to be current and to excel in key roles, performance support can both increase returns and reduce certain risks.”

The professor also highlighted the impact boards can have: “Top-down approaches can stifle creativity. The risk of unfulfilled potential and missed opportunities is especially high where there is inflexibility, limited challenge and a lack of freedom and diversity of thinking. Direction is about thinking as well as doing. Directors can play a key role in challenging traditional assumptions, conventional wisdom and prevailing practices.”

“Today’s directors are expected to exercise individual judgement and take a wider range of interests into account. They should also avoid self-interest, resist vested interests and focus on what is best for the companies on whose boards they serve. The last 30 years have taught me that one of the surest ways of building trust and reducing strategic risk is to encourage challenge and diversity of thinking and build an effective board of competent directors.”

The 2017 Global Convention on Corporate Ethics and Risk Management was held at the Bombay Stock Exchange, Mumbai, India. Prof. Colin Coulson-Thomas, author of Winning Companies; Winning People, Developing Directors and three reports on cheaper, quicker and more affordable approaches to high performance, has helped directors in over 40 countries to improve board and corporate performance. Author of over 60 books and reports he has served on corporate boards and local and national UK public sector boards, and currently has a portfolio of international leadership roles. His latest books and reports can be obtained from http://www.policypublications.com/

Source : Policy Publications

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