Understanding values and simple messages key to board communication

Speaking at the 2nd Annual GRC Conference in Melbourne, Ms Birkensleigh, Non-Executive Director at the National Australia Bank (NAB)/MLC Life, also encouraged risk and compliance professionals to help boards drive and deliver strategy, as well as prepare for emerging and black swan threats. "The challenge for GRC (governance, risk and compliance) professionals that present board papers is to think am I really giving meaningful information here or am I just producing document after document," said Ms Birkensleigh. Keeping things simple is key, she stressed. Board report executive summaries should be just a page long, not a ten-page summary followed by a 50-page document, she added.hideReporting to boards, or other functions such as risk and audit committees, represents GRC professionals' 'big chance' to influence their organisations, said the non executive director. Therefore the information supplied needs to be 'relevant, timely and digestible', she said. In order for GRC professionals to fully engage with the board in an appropriate manner they must first understand its values and purpose, said Ms Birkenlsleigh. Although all boards' chief duty is to act in the interest of any organisation, how they function and the values they hold will partly depend on whether they are responsible for a listed company, government entity or not for profit organisation. So before addressing the board, risk professionals must understand where it is coming from and how it operates-for example is it collaborative or dictatorial, said Ms Birkensleigh. "If you don't know what the board values then it is hard for you as professionals to come to the board and present something that is relevant and meaningful for them," she said. "You all need to understand this if you are going to communicate with them effectively. If you don't understand and you don't listen then often what gets presented is not going to be listened to, and that is tragically often what happens in boardrooms." It is also important for GRC professionals to help boards get the right balance between conformance and performance, she continued. "Often what you find is the conformance and compliance role takes predominance of many boards agendas, when in fact where boards want to be, and why directors join boards, is strategy formulation and helping an organisation to succeed...and adding value." Risk and compliance professionals must therefore shift away from thinking solely about risk management and compliance programmes towards helping directors formulate and drive strategy, said Ms Birkensleigh. This latter role is critically important, she said. Ms Birkensleigh also said it is crucial for risk and compliance professionals to help boards prepare and deal with left field risks-the unknown unknowns and emerging risks. Although she does not expect GRC professionals to be 'soothsayers or fortune tellers', Ms Birkensleigh believes they can help organisations prepare for such threats. "Risk and compliance experts are not adding value at all if they are not thinking about how they can help in this very important domain," she suggested. This requires risk professionals to take a more open stance and look at threats and behaviours outside of their organisation. "I have always been surprised at how insular organisations are. Everyone thinks they do things the best and there is nothing they can learn from anybody else-unfortunately that is not true," Ms Birkenlsleigh told conference attendees. "The challenge you have is how do you get that message through to the organisation so there is constructive thinking about the future." No one is better placed than GRC professionals to help organisations detect and manage emerging threats, she added. Organisations need a systematic plan for how to respond to these threats and therefore risk and crisis management plans must look at the whole spectrum of risks, she continued. Reflecting on the global financial crisis, Ms Birkensleigh said that many companies sat like rabbits in headlights before and after it took hold. Some of those companies that went bust could have survived if risk professionals had been more proactive, she argued. "If as a risk manager you are not stamping your feet and getting people's attention I don't know what you are doing," she said. However, one delegate raised the issue of a risk glass ceiling, whereby there is an unwillingness or inability of management to escalate and provide information through to the board on sensitive areas, particularly strategy, behaviour and culture. In such cases, and if protocols are not in place to allow information flow up to the board, Ms Birkensleigh advised approaching the chair of the board, risk committee or audit committee directly. "You try and avoid hijacking the CEO, but at the end of the day if you have seen issues percolating that you believe need to be escalated then the chair of the board, risk committee or audit committee are the three places I would go. I would not hesitate to do that as I can assure you that they would want to know and would deal with any issues sensitively," she said.

Understanding values and simple messages key to board communication

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