FOLLOW

FOLLOW

SHARE

Briefing the Board

Risk and compliance officers may be too timid when dealing with directors.

8Oct

Stung by the perception in recent years that boards have been dropping the ball on corporate oversight, directors are looking to risk and compliance executives to provide more information about potential perils their companies face. But those executives may be wary of approaching the board about potentially damaging information, feeling it’s not their place to do so.

“I’ve dealt with general counsels and chief ethics officers who feel like they’re going to insult a board member by suggesting they are not completely well versed on these issues,” says Shanti Atkins, president and chief strategy officer of Navex Global, an ethics and compliance consulting firm. “Just because you sit on the board of a company doesn’t make you an expert in everything the day you sit in that chair,” she adds.

Finance chiefs thus need to make sure that risk and compliance officers step up to the plate and provide in-depth reports on looming hazards to the corporation. Such reports need to contain more than just numerical information, says Peter Gleason, CFO and managing director of the National Association of Corporate Directors. The reports should help board members gauge how much risk the company is willing to assume when it pursues certain activities.

Some boards are adopting a more open, interactive approach to encourage timid risk managers to come forward, say experts. “Boards are moving toward fewer presentations and reserving more time for dialogue around issues,” Gleason says. Increasingly, PowerPoint presentations are banned, he says, and presentations are briefer to accommodate discussions. Directors now often receive materials a week in advance. They are “expected to come prepared and ready to discuss the issues,” says Gleason.

Atkins cautions against using scare tactics: “I’ve seen board reports where slide after slide was warnings about fines and headline-grabbing problems,” she says. Such presentations do not lead to meaningful conversations and actionable decisions, says Atkins.

Comments

comments powered byDisqus
Cfoport

Read next:

Finance At BeyondCore

i