There is inevitably a large section of a Board Effectiveness Review which focuses on risk. Many questions ask how a Board anticipates, identifies and manages risk.
A recent article in the Harvard Business Review on "building resilience" in organisations made me wonder whether there is an additional way of assessing this.
The six features most often cited by leaders of resilient organisations are:
- Coherence ( joining things up within an organisation and across the context it operates in);
- Adaptive capacity (being clear what needs to change and aligning resources and mind sets accordingly);
- Agility (making decisions at the right speed which could be slowly just as much as quickly);
- Relevance (consistently delivering what stakeholders need now and in the future);
- Reliability (consistently doing things within pre-agreed boundaries);
- Trust (ensuring trust with all stakeholders who have influence on their viability now and into the future).
It occurs to me that if a Board can show that each of these features is present both in the boardroom and the wider organisation, the chances are that they are also managing risk in a responsible and proactive way.
I wonder how Boards would react to competence based interview questions such as: “can you give me a recent example where this Board has successfully joined up all aspects of its business internally and also across the environment in which it operates?”.
Or "how as a Board can you be sure that this organisation is consistently delivering all of its stakeholders requirements, now and into the future?" or finally, "what mechanisms do you have in place to give you confidence that the Board and the organisation have high levels of trust with all those who have influence on its legitimacy and viability?".
These questions are a little trickier than some of the more predictable ones because they straddle the line between process and culture. But here is the point, managing risk, just like building resilience, requires not only strong processes but also appropriate mind sets and ways of being.