How are boardrooms dealing with the current uncertain corporate landscape? Here we reflect on the key takeaways from discussions at this recent breakfast briefing for the boards of large and listed companies. Mazars partnered with Board Agenda for this exclusive event which featured a raft of top speakers considering the navigation of new and emerging risks.
In the keynote address, Irene Dorner, Chair of Control Risks and former CEO and President of HSBC USA, told the room - companies should avoid trying to be “ready for everything”, when it comes to risks in the current business environment, and instead focus on being “ready for anything”. She advised on the real advantages to this resilience approach. “Companies that can anticipate risks and respond to them better gain enormous competitive advantage over those who don’t or can’t.”
Read our round-up of the two panel session discussions below.
5 key takeaways for boards - building resilience in the face of new and emerging risks
1. Tackle emerging risks as a priority
Boards cannot devise a response plan to everything that might go wrong – so must focus on the emerging risks.
These emerging risk areas should include cyber threats, security, deglobalisation, regulatory and operational risk.
2. Best approaches to anticipating risk
Risk reviews can be structured around future scenarios occurring at different timeframes and stress testing the business to see how it might respond.
Alternatively, boards are creating a risk register of emerging risks and ‘unknowns’ which are then observed and re-evaluated at regular intervals, using a matrix judging how near they are in time and physical proximity.
3. Focus on operational resilience
Disclosure demands mean that many companies are effective in their financial resilience but far less so in their operational resilience.
4. Stakeholder capitalism means broader risks
The panel warned boards that the introduction of stakeholder capitalism makes risk management and resilience a much broader topic to address. A shift in metrics from financial to non-financial – including carbon emissions – has broadened risks further.
5. Prioritise boardroom skills and education
Boardroom skills fit for the current risk environment are critical – but boards often lack skills and knowledge in digitisation and ESG.
The ever-changing risk landscape has also shifted attention to the importance of board education and refreshing of skills to suit.
Artificial intelligence was also cited as an area not yet well understood at board level with governance structures to manage advancements in that area also lacking.
Read more detailed commentary on the discussions here.
5 key takeaways for boards -the evolution of ESG risk and resilience
1. Boards need more complete ESG data and information
Boards are still not receiving enough data about ESG - Chris Fuggle revealed latest research that indicate 39% of boards believe they do not receive enough information about ESG to fulfil their obligations.
Such clarity of data and information is key to enable decision making – and boards must develop a deeper understanding of their own business’ “drivers” in moving towards an ESG agenda.
2. Knowledge and understanding of environmental issues is essential
Awareness raising and increasing understanding is still a big issue – and it is important for boards to have generative and constructive conversations about a response to the climate emergency.
There appears to be a significant gap of expertise and understanding on boards to be able to tackle the full complexities of climate change. Boards should look to include experts in discussions to fill holes in knowledge.
3. Making commitments regardless of growth
Whilst awareness and action around climate issues were seen as essential to business resilience - the panel also reflected on a warning: companies may have to consider that transitioning to net zero may involve some years with reduced growth, whilst necessary changes are made within the business.
Concern was noted however around the role of investors in supporting such transitions.
4. Leadership is integral to effective ESG and business resilience
Effective leadership is absolutely essential to making progress on climate change and other ESG issues. And leaders must learn to manage with less certainty and information than they are used to in these changing times – while current structures and systems catch up.
5. Incremental change can be made now – don’t wait for ‘perfection’
Our Global Head of Sustainability, Chris Fuggle has reflected on the discussions held around ESG: “There will of course be front runners in sustainability but perhaps only the minority will completely transform their business as a result. For the rest, what’s important is that they quickly understand which ESG drivers, and topics, are relevant and that they address these in a way which balances current business needs, wider stakeholder needs and longevity. Incremental progress on ESG from the majority may outpace the procrastination caused by seeking transformational change from day one. It also provides a great learning opportunity for bigger moves in the medium term.”
Read more detailed commentary on the discussions here.
Panel session 1: Building resilience in the face of new and emerging risks
Irene Dorner - Chair at Taylor Wimpey plc and Chair at Control Risks
Irene is a former non-executive director, Rolls Royce Plc and Virgin Money Plc. Previous roles include CEO of, President HSBC, USA and Group Managing Director of HSB Holdings. In 2021, Irene was named the year's 'Most Powerful Woman in Banking' by American Banker and she was recognised with American Banker's Lifetime Achievement Award.
Carolyn Clarke - Founder and CEO Brave, INED at Starling Bank
Carolyn is a leading expert in the fields of risk, assurance, control, compliance and conduct. Founder and CEO of board consultancy Brave, she is also a member of the Board of Starling Bank where she chairs the Ethics and Responsible Business Committee. She also chairs the Audit Committee of Agilyx, a pioneer in the plastics recycling sector and is Chair of the Board of Care International UK as well as a member of the Global Council of Care International. Until December 2019 Carolyn was the Head of Audit, Risk and Control at Centrica. Prior to joining Centrica, she spent almost twenty years with PwC, and seven as a Partner.
Liam Healy - Senior Vice President and MD - International at Diligent Corporation
Liam is the senior vice president (SVP) and managing director, International at Diligent Corporation, the leader in modern governance providing SaaS solutions across governance, risk, compliance, audit and ESG with $600 million in revenue. In his role, Liam leads all aspects of Diligent’s business in the APAC and EMEA regions including new client acquisition, customer success, marketing, professional services, and finance. He previously served as managing director of EMEA; SVP of Diligent Entities where he doubled the revenue of the business unit and head of sales at BoardEffect, which was acquired by Diligent. Prior to his career in business, Liam spent eight years playing and coaching professional baseball in America.
Panel session 2: The evolution of ESG risk & resilience
Dr Sally Uren OBE - CEO at Forum For the Future
Sally has overall responsibility for delivering the Forum’s mission to create a sustainable future. Sally also acts as Chair of Kingfisher Plc’s advisory Council, is a member of Kimberley Clarke’s Sustainability Advisory Board and an independent advisor on Advisory Boards for several other global businesses. She is a judge for the Observer Ethical Awards, the Guardian Sustainable Business Awards and the Queens Award for Sustainable Development.
Ioannis Ioannou - Professor and Advisor on sustainability leadership and corporate responsibility
Through his academic work, advisory roles, teaching, and engagement with executives, Ioannou focuses on understanding whether, how and the extent to which companies and capital markets can lead on the path towards a sustainable future. More specifically, Ioannou is regarded as a leading authority on how companies strategically integrate environmental, social and governance (ESG) factors into their processes and structures and how the investment community perceives, evaluates, and reacts to such corporate attempts to integrate ESG.
Ioannis graduated magna cum laude from Yale University, majoring in Economics and Mathematics and holds a Ph.D. in Business Economics from Harvard University and the Harvard Business School.
Among his numerous advisory roles, Ioannis is the Co-Chair of the Sustainability Advisory Panel of Merck KGaA, a member of the ESG Advisory Board of the DWS Group, a member of the World Economic Forum Experts Network specialising in Sustainable Development, and a member of the Advisory Board of AXS Investments Institute for Sustainable Investing.
Susan Hooper - Chair at Tangle Teezer & Inter.Earth, NED at Uber & Moonpig
Susan is Chair of Tangle Teezer and Inter.Earth and sits on the Boards of Moonpig plc (Chair of the Remuneration Committee), EUROWAG plc (ESG and workforce Lead), and Uber UK. She is Acting Chair of Carbon Gap, is involved in several start-ups in carbon capture and sustainability and is also an Ambassador for the World Travel & Tourism Council.
Prior to this, Susan was Managing Director of British Gas Residential Services. She joined British Gas from the Acromas Group where she was Chief Executive of the Travel division, responsible for Saga Holidays, Hotels, Cruises, the AA Travel division and Titan Travel. Previously, she held senior roles at Royal Caribbean International, Avis Europe, PepsiCo International, McKinsey & Co, and Saatchi & Saatchi, living in over seven countries worldwide.
She was Chair of Caresourcer.com in Edinburgh and has held several non-executive directorships including Department for Exiting the European Union (DExEU), Wizz Air plc, Courtaulds plc, Royal & Sun Alliance plc, Transcom, First Choice Ltd., S.C Johnson, Whitbread plc, Affinity Water and The Rank Group plc. Susan was also a member of the Advisory Board of the LUISS Business School in Rome.
Chris Fuggle - Partner and Global Head of Sustainability at Mazars
Chris is the global leader of Mazars’ sustainability services and also leads Mazars UK’s sustainability practice; providing sustainability advisory and assurance services to a range of corporate clients across multiple sectors.
Chris is a board member of The Academy of Business in Society (ABIS) and member of the Chartered Institute of Management Accountant’s Corporate Reporting Development and Research & Development panels.
Chris is a regular commentator on ESG issues – both in the press and as an expert speaker at industry events.