Risk Management Advice for Boards

If you sit on a board for a company, there are critical things you should know about the company’s business continuity plan. Although there’s virtually no management team that relishes time or resources spent on these plans, the investment is worth it when an unplanned incident occurs. Having a road map in place for your BC team to follow results in quicker recovery and a reduction in losses. As a board member, it’s your responsibility to take these plans seriously.

Risk Management Advice for Boards before an Event

  1. Define your communication requirements and role
    Ultimately, during a crisis, the CEO/executive team is in charge, but as a board, it is important that you get necessary updates. Discuss what frequency of communication you require and the role the board members will play, if any, when talking to the media or public.
  2. Participate in practice sessions
    If the team is expected to execute the plan successfully during a real event, it’s imperative that employees practice drills and refine their strategies as a result of learning experiences from the drills. Board members need to be a part of this equation or when a real event occurs the team members won’t understand how and when to involve you.
  3. Understand the company’s risk profile and critical resources to achieve strategic objectives
    Discussions and decisions about how to respond to various events need to be made with a clear understanding of the company’s most critical lines of business and priorities and how those might be vulnerable to various incidents. Understanding the products and services that are most crucial to the success of the company will help the management team and board make on-the-fly decisions when necessary, as well as guide the development of the business continuity plan. An ancillary benefit of understanding the risk profile is that it helps leaders frame and execute strategy even under normal business conditions.

Risk Management Advice for Boards during an Event

  1. Stay calm and get the facts; trust the plan
    With a business continuity plan in place, board members should stay calm, follow the plan and provide support when called upon. With proper preparation, drills and execution, the management team and employees will know the protocol for updates and reliance on the board. Trust the plan.
  2. Assess the situation and management’s response
    Take note of what works and what could be done differently, so that when updates to the plan are completed after the event, your feedback can be considered.

As a member of a company’s board of directors, you have certain risk management responsibilities before and during a crisis. Foremost, you must ensure that there is a viable and tested business continuity plan in place. If you have questions about the best tools or business continuity strategies, we are here to help. Please give us a call at 877-833-7763 or contact us online, and we’d be happy to share our insights with you.