Managing Board Member Risk – Part Two

Overview

In my Part One blog, I mentioned that much has been written and discussed about corporate risk. We discussed key focus areas and the need to challenge your risk management plan. I also asked the questions: Does my team have a sense of urgency to find our weaknesses? Are they implementing safeguards?

In Part Two, I ask the following questions: How good is my risk management team? What attributes do they need to deliver results?

Where to Focus – Team and Team Leadership

Many sports teams have a great game plan but fail to deliver on game day. Various factors, such as conditioning, play calling, coaching, and team personnel, contribute to the outcome

Knowing that the board has the right team in place to proactively manage risk provides reassurance and helps everyone sleep better at night.

When is the last time that management has taken a hard look at the risk management team? What is the basis of their assessment? Has the board engaged in discussions with management regarding the team?

If you are new to the board, you will want to fully understand the capabilities of your team. Consider using the suggestions below to assist in your understanding of your team’s skills. Engage in conversations with the board and management.

If you are a board member that has engaged in conversations over the years regarding the team and its skills, consider using the following suggestions as a refresher, to identify areas where individuals may need training or where new skills need to be developed. Be proactive and engage in conversations with the board and management.

When evaluating a team member, search for specific qualities that contribute to the company’s success. Keeping the team challenged and motivated is essential. A person and team leading a company’s risk management efforts should, in addition to strong technical skills, possess a combination of analytical, strategic, and leadership skills. Below are some of the key attributes that an individual and team should possess to guide a company through the never-ending array of situations.

• Passion – A deep commitment and enthusiasm for risk management, driving continuous improvement and proactive decision-making. Passion fuels perseverance in tackling

challenges and fosters a culture of diligence and responsibility within the company

• Curiosity – A strong desire to explore new risks, trends, and emerging threats and opportunities. A curious risk leader questions assumptions, seeks innovative solutions, and remains open to different perspectives to enhance risk mitigation strategies
• Strategic Mindset – The capability to align risk management with business objectives
• Problem-Solving Skills – Quick thinking and innovative approaches to mitigate risk
• Attention to Detail – Vigilance in identifying potential risks before they escalate
• Strong Communication – Ability to clearly explain risks and mitigation strategies to executives and stakeholders whether verbally or written
• Decision-Making Skills – Confidence in making critical choices under uncertainty
• Leadership & Influence – Ability to lead teams and influence company-wide risk culture
• Integrity – Commitment to ethical decision-making and compliance
• Analytical Thinking – Ability to assess risks, identify patterns, and interpret complex data
• Adaptability – Capacity to respond to emerging risks and changing regulations
• Resilience & Composure – Staying calm under pressure and navigating crises effectively
• Continuous Learning – A commitment to ongoing education and professional growth, staying updated on industry best practices, regulations, and evolving risk landscapes. A leader who values learning fosters a culture of knowledge-sharing and adaptability within the company

What’s Next – Oversight

Effective risk management requires ongoing board oversight, collaboration with executive leadership, a dynamic approach to evolving risks and a great team to execute the plan. Attracting and retaining individuals with the right personal attributes is never ending and requires the board’s attention. Pay more attention to the team, and the team will guide the company and the board to effectively minimize risk.

Final Thoughts

Having the right leadership and team members who possess analytical, strategic, and leadership skills is crucial for effective risk management. You may sleep a little better, you may feel a little better and you have put yourself in a better position to mitigate risk.

This article was partially generated with the assistance of AI technology.

**Marty Brunk is a board director and financial expert with extensive experience in audit, financial reporting, and internal controls evaluation. He brings significant value to corporate boards in the areas of financing, mergers and acquisitions, governance, risk management, compensation, and negotiations. Marty has deep experience working with private equity firms and their portfolio companies, owners and their privately held businesses. He has board experience as Board Chair, Board President, Board Vice Chair, Treasurer, and Finance Committee Chair for private, not-for-profit, government, and foundation boards. Marty’s experience also spans multiple industries and ranges from early-stage entrepreneurial companies to later stage private equity portfolio companies.