Twenty years ago the US introduced the Sarbanes-Oxley (Sox) rules, which make board directors personally liable for company accounts. Sox was signed into law by President George W Bush after the Enron scandal of 2001, then the largest bankruptcy reorganisation in American history.
Globalisation and its effects permeate the infrastructure and operations of almost every company. As a result the business ecosystem is far more interconnected and complex - which brings more risks. It is vital that each member of the board has a full understanding of the business’s risk profile and the effectiveness of its risk management.
Ineffective boards bring enormous consequences for society. Misperceptions of risk have led many boards, and thus their organisations, into poor decision-making or worse – including business disasters.
Peter Drucker, the late Austrian-American business consultant, said: “Culture eats strategy for breakfast”, and most company directors will be aware of the power of culture to accelerate business and team performance.
Almost every business runs the risk of supply chains being disrupted by geopolitical tension. To understand your company’s vulnerability, your first step should be to ask the procurement team about its risk map and the resilience it has built into supply chains. This will be different for every business and for each distinct supply market. Setting aside time and resources to support procurement is crucial.
An increasing number of chief financial officers who stayed loyal to their companies during the pandemic are leaving their jobs, with some lured away by lucrative offers from private equity-backed businesses.