Identifying and understanding emerging risks is critical, as directors know that disorder and disruption are no longer the exception but the norm. Resilient organizations are the ones that are most likely to survive and thrive in this changing world, and boards play a key role in fostering resiliency in the companies they serve. Investors and regulators are recognizing the importance of boards taking an active approach to risk oversight and applying leading risk oversight practices. Every board has an opportunity to disclose beyond the boilerplate in the proxy statement.
Because it is imperative that directors stay educated about new and emerging risks, we believe that boards should evaluate the effectiveness of their risk oversight practices from time to time. This evaluation is made more effective when it is accompanied by an effective process and insights that provide directors assurance that the evaluation exercise is sufficient and sound. That’s why Protiviti is excited to collaborate with The Board Institute (TBI) in developing the TBI Protiviti Board Risk Oversight Meter to boards desiring to enhance and improve their risk oversight process.
The TBI Protiviti Board Risk Oversight Meter is a recent addition to The Board Institute’s suite of world-class, validated tools. It is unique in that it offers a flexible, cost-effective method for boards to self-evaluate their risk oversight in an objective, participatory exercise. Participants, who include directors and others chosen by the board, can provide input regarding the board’s processes using a web-based tool which saves time and simplifies the usual logistics to conducting board self-evaluations. It also allows participants to contribute their responses according to their own schedules.
Using the information gathered, the tool generates results in a robust, insightful and actionable report that highlights not only the board’s strengths in overseeing risk, but also the areas where the board can improve its practices. In this regard, the report includes quantitative and qualitative information, as well as anonymous commentary that provides further color and context to the results. Additionally, the report benchmarks against best practices and validates the quality of risk oversight considering the expectations of key constituencies in the marketplace. The overlay of best practices and market information enables directors’ confidence, by making it possible for them to come up to speed quickly and improve their risk oversight continuously in these rapidly changing times.
What I like most about the TBI Protiviti Board Risk Oversight Meter is that it not only supports a board best practice (i.e., periodically self-evaluate the board’s effectiveness), but mirrors how boards execute that practice. Having assisted boards with their self-assessment exercise, I particularly like how the tool can facilitate dialogue among directors as to where, how and why to improve their risk oversight process. That is what you look for in a tool of this nature in the board space. And because assessments can be repeated, the oversight process can be refreshed continually to stay current with a dynamic business environment.
Are you focused on improving risk oversight at your company? Engage in a dialog with us. To learn more, click here.
[…] TBI Protiviti Board Risk Oversight Meter leverages years of research to provide a tool that enables a board to highlight its strengths and limitations through a participative process and insightful reporting of the range of responses, the mean response, best practices, anonymous commentary, and legal and regulatory requirements germane to board risk oversight. According to noted organizational resilience expert, Dan Sharp, principal of The Board Institute, “With disorder and disruption becoming the norm rather than the exception, it’s critical that boards have the skills to help their companies prepare for and manage impending risk. Our tool highlights the importance of organizational resiliency and the board’s role in driving it.” […]