BOARD COMPOSITION – GETTING IT RIGHT
The importance of achieving the right blend of directors in the boardroom should not be underestimated. Board composition plays a critical role in the future success and prosperity of any organisation, particularly as it pertains to risk management.
In order to thrive in the current economic climate and beyond, it is the responsibility of the board of directors to set the tone for the wider organisation. In any well run enterprise the board should develop the mission, strategies and overall direction of the company in all facets of the business, but particularly when it comes to risk. Without this brand of strong leadership from the top down, businesses will falter.
Due to the important role played by the modern board of directors, it is of utmost importance that individuals with the right qualities are appointed. Directors should personify the overall values and direction of the company, and again, although this should be the case with regard to all aspects of the business, the message rings especially true when we consider the process of risk management.
A capable and experienced board is vital if companies are to keep a firm grip on the overall direction of the business. Without this leadership, manageable difficulties become much more likely to escalate out of control. Weak or ineffectual leadership at the board level, particularly on risk management, is likely to see a company experience significant financial losses, reputational damage or in extreme cases cause the businesses to disappear altogether.
Apr-Jun 2014 Issue