Day 3 of the company directors course, and we had a superb facilitator, Peter Fitzpatrick, who has loads of experience, and even better, is a well versed and highly competent at providing it. He kept us engaged all day. Quite a skill. We’re 60% of the way through, and it’s a weekend, so I can take a pause to reflect on another full day with lots of learning.
Risk and Strategy are two of the most important matters a Board will focus on. Risks come in all shapes and sizes, seemingly from anywhere, and you can never exclude all risk altogether. It’s more about how aware the company is about their risk environment, what appetite they have for it, and can they act when a risk suddenly blows up in their face? As for strategy, it’s the essential role of directors to look 3 to 5 years ahead and keep the company moving in the right direction, whatever that is.
Here are my takeaways in regards to risk and strategy:
- There are positives with risk – they can make you look after your company better, your people, save money.
- It’s important to keep asking questions – never assume – rather than making statements.
- A board refresh will be important from time to time, so you don’t get stuck in the same way of thinking.
- There are various ways to manage risk, and boards have a duty of care and oversight role.
- The company’s risk appetite needs to be defined, with KPIs (such as ‘our maximum gearing ratio will be x%’ or our ‘days creditors will be y‘)
- Crisis management plans needs to be prepared, with various scenarios, and from time to time, rehearsed.
- A diagram/overview can place all valid risks in one chart, which can be updated, and have a risk register with more details on what they are and how to mitigate and deal with each.
- Have a full set of risk documents, stored, updated, and understood.
- On strategy, first look at Simon Sinek’s ‘The Why’ – people buy the why, not the what or how. Do you know your ‘why‘?
- 60% of workers are disengaged with strategy and the workplace – engage them, communicate, involve them, inspire them.
- Developing a strategy is 1 of the 7 key roles a board does.
- 4 Russian brothers can be useful: Moreov, Lessov, Ridov, Tossin (!)
- Allow a good time for strategy day with enough preparation. November can be a good month to hold a strat day.
- What’s your main game? Don’t stray from this. What are you (or can you be) best at?
- A good external facilitator is required for strat days.
- Have KPIs, get everyone’s commitment and hold people accountable.