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Feb
12
Tue
2019
9:00 am How to become a Non-Executive Di... @ Institute of Directors
How to become a Non-Executive Di... @ Institute of Directors
Feb 12 @ 9:00 am – 4:30 pm
How to become a Non-Executive Director – London 12 February 2019 @ Institute of Directors
Find out how you can obtain a Non-Executive Director position by booking a place on this interactive 1-day course. <img data-attachment-id='113603' data-permalink='https://nedworks.net/10-things-non-executive-directors-can-do-to-satisfy-their-legal-responsibilities/ned3-2/' data-orig-file='https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=1500%2C883&ssl=1' data-orig-size='1500,883' data-comments-opened='0' data-image-meta='{'aperture':'0','credit':'','camera':'','caption':'','created_timestamp':'0','copyright':'','focal_length':'0','iso':'0','shutter_speed':'0','title':'','orientation':'0'}' data-image-title='NED3' data-image-description=' ‘ data-medium-file=’https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=300%2C177&ssl=1′ data-large-file=’https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=695%2C409&ssl=1′ class=’alignright size-medium wp-image-113603′ src=’https://i0.wp.com/www.nedworks.net/wp-content/uploads/2015/04/NED31-300×177.png?resize=300%2C177&ssl=1′[...]
Mar
12
Tue
2019
9:00 am The Effective Non-Executive Dire... @ Institute of Directors
The Effective Non-Executive Dire... @ Institute of Directors
Mar 12 @ 9:00 am – 4:30 pm
The effective Non-Executive Director course helps you to be an effective non-executive director. It instils a real sense of what is expected of NEDs, and how you can meet the challenge. <img data-attachment-id='113603' data-permalink='https://nedworks.net/10-things-non-executive-directors-can-do-to-satisfy-their-legal-responsibilities/ned3-2/' data-orig-file='https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=1500%2C883&ssl=1' data-orig-size='1500,883' data-comments-opened='0'[...]
Apr
23
Tue
2019
9:00 am How to become a Non-Executive Di... @ The Waterfront
How to become a Non-Executive Di... @ The Waterfront
Apr 23 @ 9:00 am – 4:30 pm
Are you thinking of becoming a Non-Executive Director as part of a Portfolio Career or to develop your boardroom skills prior to taking up an executive director role? <img data-attachment-id='211' data-permalink='https://nedworks.net/how-to-become-a-non-executive-director-bristol-21-january-2013/boardroomlr/' data-orig-file='https://i1.wp.com/nedworks.net/wp-content/uploads/2013/01/boardroomlr-e1403708151819.png?fit=600%2C486&ssl=1' data-orig-size='600,486' data-comments-opened='0' data-image-meta='{'aperture':'0','credit':'','camera':'','caption':'','created_timestamp':'0','copyright':'','focal_length':'0','iso':'0','shutter_speed':'0','title':''}'[...]
May
23
Thu
2019
9:00 am How to become a Non-Executive Di... @ Institute of Directors
How to become a Non-Executive Di... @ Institute of Directors
May 23 @ 9:00 am – 4:30 pm
How to become a Non-Executive Director – London 23 May 2019 @ Institute of Directors
Find out how you can obtain a Non-Executive Director position by booking a place on this interactive 1-day course. <img data-attachment-id='113603' data-permalink='https://nedworks.net/10-things-non-executive-directors-can-do-to-satisfy-their-legal-responsibilities/ned3-2/' data-orig-file='https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=1500%2C883&ssl=1' data-orig-size='1500,883' data-comments-opened='0' data-image-meta='{'aperture':'0','credit':'','camera':'','caption':'','created_timestamp':'0','copyright':'','focal_length':'0','iso':'0','shutter_speed':'0','title':'','orientation':'0'}' data-image-title='NED3' data-image-description=' ‘ data-medium-file=’https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=300%2C177&ssl=1′ data-large-file=’https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=695%2C409&ssl=1′ class=’alignright size-medium wp-image-113603′ src=’https://i0.wp.com/www.nedworks.net/wp-content/uploads/2015/04/NED31-300×177.png?resize=300%2C177&ssl=1′[...]
Jun
11
Tue
2019
9:00 am The Effective Non-Executive Dire... @ The Plaza
The Effective Non-Executive Dire... @ The Plaza
Jun 11 @ 9:00 am – 4:30 pm
The effective Non-Executive Director course helps you to be an effective non-executive director. It instils a real sense of what is expected of NEDs, and how you can meet the challenge. <img data-attachment-id='113603' data-permalink='https://nedworks.net/10-things-non-executive-directors-can-do-to-satisfy-their-legal-responsibilities/ned3-2/' data-orig-file='https://i1.wp.com/nedworks.net/wp-content/uploads/2015/04/NED31.png?fit=1500%2C883&ssl=1' data-orig-size='1500,883' data-comments-opened='0'[...]

Learning from and resolving boardroom conflict

Boardroom conflict

Conflict drains all those involved of three valuable commodities: time, energy, and money. It destroys morale, efficiency and productivity, and in turn, can devastate not only the commercial and professional interests of the people caught up in it, but also their health and family life.

Why are such disputes not resolved swiftly, reasonably, sensibly and amicably? What strategies can parties adopt to resolve difficult conflict situations?

The recent hostile vendetta between José Mourinho and Paul Pogba at Manchester United Football Club will have created considerable negativity and was patently draining for the entire organisation.

The dispute reached its lowest point when the media published reports of a bitter exchange at the training ground. The publicity surrounding the player’s poor relationship with his manager showed that he was ripe for a transfer, resulting in greater unease and uncertainty for the entire club.

Can we avoid such conflicts in the boardroom? The short answer is no.

Elon Musk will have endured many bitter arguments with Tesla’s board of directors before finally submitting to a crushing settlement with the Securities and Exchange Commission (SEC) over fraud charges. Prior to the SEC suit, portfolio manager Aeisha Mastagni told Forbes that Tesla’s board was “not sufficiently independent to properly oversee Elon…the board is rife with conflicts, including Elon’s brother Kimbal Musk, who didn’t take his role as a board member seriously enough to attend at least 75% of the meetings.”

Fortunately, Musk seems to have had good experiences with mediation: his two previous and costly divorce suits were dealt with through mediation and, in 2014, mediation resolved his dispute with the United Launch Alliance (ULA), enabling SpaceX to move into the highly profitable spy-satellite business. These experiences may have influenced his decision to enter into settlement negotiations with the SEC rather than jump directly to litigation.

In relation to the recent Pret a Manger debacle, one might wish to have been a fly on the wall to witness the differing perspectives that were bitterly and fiercely expressed at board meetings over how to face the public regarding allegations of product-associated allergy deaths.

Questions

Events such as these can leave us asking big questions. Why do individuals and organisations behave so irrationally when embroiled in a conflict that can result in lengthy, costly and destructive tribunal litigation? What is it that makes so many executives and professionals destroy their daily working environment through vitriolic disputes, often reducing them to childlike and senseless behaviour in the boardroom?

Why do directors, trustees and other senior executives so readily allow themselves to deviate into public spats which can have a devastating effect upon an organisation’s market position and share value?

Avoidance

Can we avoid such conflicts in the boardroom? The short answer is no. Conflict is an integral part of all human interaction, whether it be in the business environment, domestically or internationally.

However, all disputes have a common thread: Somebody wants something and another is not willing to give it. The reasons for wanting will be partly rational and partly emotional. The rational part could be: “I need my opinion to be accepted because it is the only good way forward for the company.” The emotional element is: “You never listen to my opinion or show any respect for my views.”

Similarly, the refusal may be rational: “Your idea would simply not work economically,” accompanied by the underlying and probably unspoken emotional: “We do not see why we should always have to give in to your unreasonable demands.”

Yet, we are never without conflict. It is an essential part of our very existence. Every decision a board chairman or member takes involves a potential dispute because whenever they say “yes” to someone or something, they are inevitably saying “no” to someone or something else.

Working with conflict

Despite this there are many positive aspects of conflict and if we can learn to work within its confines it is possible to manage it more effectively and productively. Disputes can, for example, act as a necessary precursor to change. Without conflict, organisations are liable to stagnate and become devoid of transformation or the prospects for innovation.

The problem with boardroom disputes, as with most other conflicts, is that emotions frequently tend to overwhelm reason. Board members will have been driven into disputes by a myriad of psychological and emotional drivers, which invariably cloud their judgement and make it impossible for them to see things rationally.

Without conflict, organisations are liable to stagnate and become devoid of transformation or the prospects for innovation.

Members of the board can be left scratching their heads in bewilderment at the childlike antics of a fellow member, often hoping that common sense will prevail. It rarely does. Each board member fervently believes that they are completely in the right, and the other is wholly in the wrong.

Further to this, each will have a tendency to believe that they are the only normal, rational and logical person in the room. An aggravating feature to such disputes is the perception that individuals “are not being heard” or that “no one is listening.” This heightens anger and frustration, and can prolong disputes.

Anger is most commonly related to some form of loss, which might be tangible in the form of money, property, assets, or objects. It can also be intangible in the form of a loss of respect, approval, admiration, aspirations, dreams or hopes. When loss is precipitated by perceived injustice, anger is even more acute.

In the boardroom, members constantly strive for recognition, respect and endorsement. If a loss of this is associated with an injustice, then a board member’s self-esteem and desire for approval is perceived as being directly under attack.

Defuse and resolve

To help defuse this anger and resolve the dispute it is necessary to do two things:

1. Ensure that the disputing member feels heard. This means more than just nodding and saying, “Yes we do understand your point”, and then quickly moving on. There is little more infuriating than to feel that one’s point of view has been ignored and summarily dismissed.

2. Look for and explore the perceived loss along with any injustice that might be lurking in the background. Once these are fully acknowledged—and if possible, addressed—the anger is dissipated and the complainant can feel properly heard.

The value of apology

Any form of criticism, rebuke, condemnation or rejection will affect a board member’s self-esteem: all executives have an aversion to disapproval, as it infers a loss of respect and deference. It will therefore invariably result in an emotional and defensive response.

This is why an apology, or an admission of liability, is so problematic for many leaders and executives. It involves an element of self-condemnation and an admission of fault. The word “sorry” is the quickest, cheapest and most effective means of resolving a dispute, but it is rarely used when it is most needed.

Consider the following examples:

• The CEO of Thomas Cook refused to apologise for the deaths of two children from carbon monoxide poisoning while they were on holiday in Corfu. Giving evidence at the inquest, the CEO stated “I feel incredibly sorry for the family—incredibly sorry. But I don’t have to apologise.” Shortly thereafter, Thomas Cook’s shares plummeted and the company came close to collapse.

The CEO of Thomas Cook refused to apologise for the deaths of two children from carbon monoxide poisoning while they were on holiday in Corfu.

• Sir Bernard Hogan-Howe, the Metropolitan Police Commissioner, refused to apologise to Lord Bramall over the police’s treatment of him during an investigation into historical child abuse, despite prime minister David Cameron saying that the Force should apologise. This had unfortunate repercussions for the reputation of the entire police force.

• Clive Schlee, CEO of Pret a Manger, reportedly sent a handwritten letter of condolence to the family of a 15-year-old schoolgirl two years after her death in July 2016, and just weeks before the event was due to be scrutinised at an inquest.

Boardroom disputes are rarely as simple as they might appear on the surface. They may nevertheless be much more effectively managed if there is an understanding of the emotional drivers of the seemingly irrational behaviour of fellow board members. Such behaviour is likely the product of some loss to their self-esteem or an attack upon their values.

With improved psychological insights, it is possible to focus upon the essence and core of conflict, and apply greater tolerance and understanding. Attitudes and approaches can then become more flexible, enabling disputes to be addressed with greater efficiency and success.

The post Learning from and resolving boardroom conflict appeared first on Board Agenda.

[…]

Press release: Protect your pension pots from investment scams and negligent trustees

The Insolvency Service is warning people to guard their pension savings from investment scammers and negligent trustees. […]

Culture and intangibles top list of engagement concerns

VW

It’s culture, stupid! Whichever way you look at the annual letters from two of the world’s biggest investment managers, it all comes down to a concern for corporate culture.

Culture was either the headline or a key underlying theme in letters to boards and CEOs from State Street and BlackRock last week. As far as they are concerned it is this, a key element among intangible assets, that is at the heart of company performance in the current business environment.

It’s not hard to see why. Recent scandals such as VW, Uber, Wells Fargo and the Libor debacle have offered clear demonstrations of where culture can go badly wrong.

State Street’s letter accepts that culture is hard to handle for boards and managers but says: “…at a time of unprecedented business disruptions, whether in the form of technology, climate or other exogenous shocks, a company’s ability to promote the attitudes and behaviours needed to navigate a much more challenging business terrain will be increasingly important.”

State Street adds that recent studies show intangibles like corporate culture are “driving a greater share of corporate value”.

Meanwhile, Larry Fink, chief executive of BlackRock, stresses the importance of corporate “purpose” and its connection with culture and their contribution to long-term growth. “Purpose guides culture, provides a framework for consistent decision making and, ultimately, helps sustain long-term financial returns for the shareholders of companies,” writes Fink.

Photo: Shutterstock

State Street takes the stress on culture a step further by issuing a “framework” for boards, what some may view as a handy pocket guide to help them through the process of “aligning” corporate culture with long-term strategy. It’s this process State Street calls a “material issue”.

And why this stress on culture? As BlackRock says, it’s seen as vital to long-term sustainable returns, and as fund managers increasingly shift to passive investing, stability over the long-term is what matters, not market and stock volatility.

That said, some observers believe the two letters will still come as a surprise, though not a shock. No shock because investors have underlined these issues before; a surprise, according to Ali Saribas, of Squarewell, an advisor to companies on investor engagement, because the letters reiterate the importance of intangibles, signalling the topic is not going away and is now a permanent agenda item for upcoming engagement meetings.

According to Saribas the letters could mean an intensified focus on three areas: executive pay and pay disparities as they come to be seen as proxies for corporate culture; more pressure to ensure directors resist “overboarding” because intangible issues take more time to monitor than pure financials; and demands for a stand-alone board committee to oversee social issues, or explicit indications that existing sustainability committees also include social issues in their remit. Saribas says there will need to be a “change in mindset” for many boards to come to terms with the new engagement topics.

Culture is not a topic boards find easy. A Board Agenda survey conducted last year found that 63% of respondents either work on boards that exclude culture from formal risk considerations, or fail to routinely asses the risks associated with their own corporate cultures.

When asked how well aligned their cultures were with strategy, 50% said they had spent little time on the topic or they were aware of significant gaps between strategy and culture. If culture is be is to be the focus of discussion with big fund managers many will have to play catch-up.

In commentary for Board Agenda on the survey, Erik van de Loo and Jaap Winter, professors at INSEAD, said: “Executives and non-executives need to up their game in corporate culture and be open to learn and develop.”

In an article for Harvard Business Review earlier this year, professors Stephen A Greyser and Mats Urde placed culture at the heart of internal elements that a compose a company’s brand. Investment managers know it; they want boards and managers to deal with it.

The post Culture and intangibles top list of engagement concerns appeared first on Board Agenda.

[…]

Grand Union Housing Group (GUHG) – Non-Executive Director

Non-Executive Director – Grand Union Housing Group (GUHG) Bourne End, Bedford (MK43) Grand Union Housing Group £6,000 per annum payable monthly Permanent Grand Union Homes Limited is a market sale subsidiary of Grand Union Housing Group (GUHG). We are looking to recruit a Non Executive Director to support Grand Union Homes to deliver market sale […]

The post Grand Union Housing Group (GUHG) – Non-Executive Director appeared first on NEDworks.

[…]

Citi’s information sharing deal unlikely to spread

The interest of an activist investor in a company often sparks a slew of lurid headlines describing interactions with the board in conflict terms: it’s a “fight” or a “battle”.

However, a recent deal between US bank Citigroup and activist investors ValueAct seems to be point to a new way of doing things. By agreeing to share “confidential information”, the pair may have headed off stories about conflict, in favour of working together. Indeed, Citi’s stock jumped after publication of the news.

But does the arrangement offer a brave new world where activists and boards can co-exist in a cosy new relationship? According to the experts, its probably best not to build your hopes up.

The deal looks like a reassuring arrangement. The agreement provides for a “deeper level of engagement and collaboration” and ValueAct will refrain from demanding seats in the boardroom for the duration of the scheme in return for “confidential information about the company”, as well as engagement with the bank’s senior management team and the board.

The warm tone of Citi’s press release is buoyed by ValueAct’s reputation for being a different kind of activist, what has become known as a “constructivist”—a fund that takes a much less aggressive approach to their investee companies, eschewing the now ubiquitous PR battle over demands for strategic change, or boardroom places, in favour of “useful, productive engagement”, according to the Activist Investor blog.

However, while the constructivist may seem reassuring, there are limits. It’s worth noting that Citi and ValueAct’s agreement constrains their mutual appreciation club until December this year.

While the deal looks rosy others point to the fact that it once again reveals the potential for activist influence. According to Tom Mercer, head of corporate transactions at law firm Ashurst, being able to strike a legal agreement for information not otherwise made available, reveals the growing “power” of activists in the current business environment.

For their part Citi and ValueAct have pointed towards the advantages of the agreement. Citi’s chief executive Michael Corbat cited the investor’s skills, while ValueAct praised the bank’s strategy.

Corbat says: “We see ValueAct’s expertise and shareholder perspective as important strengths and are looking forward to working together to benefit all of Citi’s stakeholders.”

Meanwhile, G. Mason Morfit, ValueAct’s chief investment officer, says: “We are excited to take our engagement to the next level and work with management and the board to help deliver excellent and sustainable results for all stakeholders.”

Generally speaking, action by activists is increasing. According to Lazard, an investment bank, 2018 saw a record volume of activity with 266 companies facing activist demands, a hike from 188 in 2017. ValueAct was only beaten by Elliott as the activist investor with highest number of positions.

But the crunch question is whether the information sharing arrangement can be replicated elsewhere, especially in the EU. This is where lawyers urge caution pointing to legislation that regulates the sharing of insider information.

In principle, investors and markets should receive the same information from a company. Those that favour one party with special information risk big penalties, a painful lesson illustrated in the UK by the £450,000 fine handed to then JP Morgan investment banker Ian Hannam in 2014, by the Financial Conduct Authority, for “market abuse” when he shared information about a client via email.

That happened under the Financial Services and Market Act 2000. UK markets now function under EU Markets Abuse Regulation, pithily known as MAR.

This governs the “unlawful disclosure of inside information” and any information sharing arrangement between a company and an investor would need to be clear it would not fall foul of MAR.

Indeed, MAR is explicit in its intentions. The regulation’s preamble makes clear it is there to “protect the integrity of the financial market and to enhance investor confidence.” But this is based, in turn, on “the assurance that investors will be placed on an equal footing and protected from the misuse of inside information.”

Meanwhile, the regulation does not intend to shut down all discussion between a company and shareholders. Some discussion of a “general nature” between management and shareholders are “essential for the efficient functioning of markets and should not be prohibited…”.

That means any agreement between a company and an investor to share information would need to walk a tightrope for fear tipping over from the general into more specific information that could the MAR alarm ringing. It goes without saying that in the US ValueAct and Citi would have written their agreement carefully. The Securities and Exchange Commission, the markets watchdog, pursues insider dealing cases vigorously.

That’s not to say information cannot be shared safely. But it does mean boards would need to take great care before embarking on such a deal to quell the fire and brimstone of an activist. For now, at least, we can expect the old order to continue.

The post Citi’s information sharing deal unlikely to spread appeared first on Board Agenda.

[…]

Early Education – Trustees

Trustees – Early Education Organisation: Early Education Reference: EE-FIN (Finance) / EE-MC (Marketing & Communication) Vacancy Type: Trustee Deadline: 28th February 2019 Region: London Vacancy Details Could you help this small national early years charity to increase its reach and impact? Trustees wanted with: financial experience to work with and possibly succeed our current Treasurer in 2022. […]

The post Early Education – Trustees appeared first on NEDworks.

[…]

Separation of powers makes for healthy board dynamics

board directors

Having the right structure at the top of a company is crucial for its success. We at Legal & General Investment Management (LGIM) think that when a single person is tasked with exercising management duties and challenging management simultaneously, this inherently presents a conflict.

Separating two of the most high-profile positions in the organisation provides a balance of authority and responsibility that is both in the company’s and investors’ best interests.

Recent news stories have illustrated the importance of splitting the two roles. The arrest of Nissan’s chariman, Carlos Ghosn, who is also chair and CEO at Renault, has set alarm bells ringing over the future of the French car company and the Renault-Nissan-Mitsubishi alliance. Stakeholders have woken up —with a jolt—to how the board-level structure led to Ghosn playing a domineering role in the company and the alliance.

Elon Musk, chief executive of Tesla, has also been forced to step down from the chairman’s role. However, the move has come after a barrage of negative news stories, but we think it’s important for boards to be proactive, rather than to wait until the company is facing turbulent times to act.

Risky business

We acknowledge that concentrating power in the hands of a single individual can be seen as an advantage for a company. It is thought by many to facilitate quick decision-making.

However, LGIM believes that, on balance, the perceived advantages do not outweigh the risks of such a structure, especially for large, complex companies. They include developing a board with an overbearing leader, absence of challenge, and poor diversity of thought.

Depending on how companies respond to our engagement, we will consider voting against the combined chair and CEO role in companies which do not agree to splitting the two senior roles when the next succession plan is put in place.

Separating two of the most high-profile positions in the organisation provides a balance of authority and responsibility that is both in the company’s and investors’ best interests. It helps to generate engaged, challenging—and sometimes even uncomfortable—dialogue. These kinds of board dynamics give us comfort that decisions are truly being scrutinised at the top.

LGIM has been engaging across the globe and voicing its concerns directly to companies for many years. And it seems that companies increasingly recognise the benefits of separation of the two functions. In 2008, just 39% of US boards were splitting the two roles compared with 51% in 2017 (Source: Spencer Stuart Board Index 2018—United States).

Currently, we at LGIM are reinforcing our engagement on the topic this year through an additional campaign in Europe. We are engaging with 14 of the largest French companies and three of the largest Spanish companies, representing a total market cap of €549bn, to encourage their boards to split the two roles when putting in place a new succession plan.

Distinctive roles

We ask for clear roles to be assigned to both the independent chair and the CEO. The CEO focuses on running the company’s business and executing the long-term strategy. The independent chair, along with the rest of the board, is responsible for overseeing the actions of management. Their role also involves board composition and succession-planning, performance evaluation of the board and managing dialogue with investors.

Companies often argue in our discussions that the presence of a lead independent director (LID) on their boards mitigates the negative effects of the combination of the roles of CEO and chair. LGIM acknowledges that they play an important role and expects all boards to include a LID; however, they cannot be substituted for the independent chair, as they have different and complementary roles and skill-sets.

Depending on how companies respond to our engagement, we will consider voting against the combined chair and CEO role in companies which do not agree to splitting the two senior roles when the next succession plan is put in place. In an evolving business environment, we believe that the roles of chair and CEO will increasingly differ. LGIM believes that two senior leaders with complementary but different skill-sets will increasingly be required to help meet the challenges of the future, and ultimately contribute to make our companies better.

Marion Plouhinec is a corporate governance analyst at Legal & General Investment Management.

The post Separation of powers makes for healthy board dynamics appeared first on Board Agenda.

[…]

Press release: Takeaway boss gets second disqualification after breaching first ban

Boss of Asian-style takeaway in Cardiff has picked up second disqualification after being caught running the business when he had already been banned. […]

Brexit, cybersecurity and climate change lead risk concerns for 2019

Even as prime minister Theresa May this week failed to gain parliamentary support for a Brexit deal, the country was being warned that the UK’s departure from the EU could “blind” corporate leaders to other risks present in the business world.

The warning came as part of predictions for risk in 2019 from the Institute of Risk Management (IRM).

Brexit and its implications remains an obvious headline risk but the IRM was at pains to point our that others risks deserve attention, notably cyber security, extreme weather and climate change, financial concerns and political uncertainty on the world stage. It’s worth reviewing what the IRM has to say.

According to Socrates Coudounaris, chairman of the IRM, businesses will continue to face risks from current macro trends.

“Leaders who think critically about the future, anticipate disruption to their sectors, while building resilience and agility in their models, will be in a better position to tackle a challenging risk environment in 2019 and thrive,” says Coudounaris.

Photo: Shutterstock

The IRM asked a range of commentators to offer their views on risk in 2019, with Steve Greece, chair of IRM’s health special interest group, warning that Brexit could obscure the view of other risks.

Elsewhere there were warning for financial services. According to Sara Christman, speaking for IRM’s banking and financial services group, institutions are prepared for the severe shocks from Brexit and are prepared, though there remain outstanding issues that could disrupt the ability to “execute strategy”.

She said “open banking” — the process of banks sharing data — was likely to be “evolution” rather than “revolution”. Cyber security will remain an issue, but so does ethics.

“Financial services are rich targets for well-funded criminal or state sponsored hacker attacks, but unauthorised access isn’t the only data threat that firms face,” she says.

The others are inappropriate use of data and unethical decision making. “We expect these threats to foster increasing cooperation between security and privacy teams to ensure that controls are aligned to addess the breadth of data risks exposure,” she says.

Ray Flynn, an IRM board member, predicts 2019 will see further examples of unethical behaviour uncovered, despite the introduction of recent legislation. The reason? Companies are better at managing external risks than they are the risks emanating from within their own organisations.

“There is a reluctance to entertain the prospect of fellow workers or even business partners, suppliers or sub contractors, as capable of underhand practices.”

The risk of exposure is increasing, he says. “There is an element of iconoclasm and bloodletting involved as the gap between the ‘haves’ and the ‘have nots’ increases, which supports whistleblowing and puts pressure on regulatory bodies to act.”

Climate is uppermost in the minds of many IRM commentators. Adverse weather will continue to happen as a result of commercial, industrial and agricultural activities affecting nature, according to Paul May, the chairman of Concordia Consultancy, writing for IRM.

Fund managers and insurers are either avoiding investments in, or insuring, industries contributing to global warming. However, he offers a warning.

“The trend to desert such industries is likely to continue to increase, but it is not proven whether that retreat would be likely to lead to their

Photo: Shutterstock

closure.

“While the rationale may be ethical and provide a ‘feel-good’ PR feeling, such investors and insurers will lose any opportunity to influence improvements and change,” he says.

The chair of the IRM’ South Africa regional group, Zanele Makhubo, is blunt, calling the unpredictability of weather patterns a “serious risk”. She warns governments will need to work with the the private sector in a multidisciplined approach if climate change is to be properly tackled.

There is also a warning that a corporate reaction to climate change now forms a significant component in reputation risk.

Victoria Robinson, head of marketing and communications at IRM, says: “Consumers are becoming more discerning and aware of protecting the planet, about the provenance of goods and, in the FMCG industries aware of slavery and working conditions—transparency is key.”

Climate is not the only issue in brand and reputation; data security is critical too. Indeed, one study puts the global average cost of a data breach at $3.6m per incident. Robinson says: “We have seen huge, well-known global corporates—airlines, hotel chains, banks and online retailers—suffer at the hands of hackers.”

As we have seen in the past extreme weather can also affect supply chains significantly. Global politics—such the US-China trade battle—could also bite.

According to Carolyn Williams, director of corporate relations at IRM, this year will see some organisations “find their supply chains are affected, some will have anticipated it in advance, perhaps built up their skills and understanding, done some risk analysis, some scenario planning and stress testing covering their extended enterprise, putting controls in place; and some will discover that their strategy of just hoping for the best hasn’t quite worked out.”

The post Brexit, cybersecurity and climate change lead risk concerns for 2019 appeared first on Board Agenda.

[…]

Press release: St Helens estate agent jailed for 4-and-a-half years

Estate agent from St Helens has been jailed for four-and-a-half years after carrying out fraud offences and perverting the course of justice. […]