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CG T5 & T6 (Topic 6: Risk (Ch8) (Risk analysis, p.204 (Risk evaluation…

- - - - Management level - exposure to risks arising from the orgs activities
      - Operational - exposure to hazards within the enterprise
      - Strategic - exposure to threats from outside
- - - - Strategy formulation, p.168
        
        SWOT analysis common
        
        Questions over contribution that independent directors can make to this
        
        Should involve senior management to some degree
      - Policy making, p.175
        
        Effectively defining what controls remain with the board and what is delegated
        
        Big picture policies, i.e. diversity policy, risk management policy
        
        Board can produce policies, or management can and board approve, but responsibility remains with board to make sure there is a policy on certain issues and that is up-to-date and functioning as intended
        
        Policies flow out of strategy
    - - Accountability, p.178
        
        To who? - some consider this to still just be the legal requirements of who they account to
        
        Increasing interest in the idea of being accountable to wider stakeholders and society as a whole
      - Supervising of executive activities, p.177
        
        Primary is financial measures
        
        Other measures required for a balanced scorecard
        
        Exception reporting can be used to minimise amount of reporting presented
        
        All measures must align with primary goals of organisation or will create suboptimisation
  - - - An increase in INEDs can lead to an imbalance, focusing on conformance more as that is their mandate
      - The balance of board attention in these areas must be carefully considered and directed by the chair, other directors must provide input
      - An increase in codes/principles has also increased focus on conformance over performance
      - Performance roles is often delegated to top management
    - - Financial reports used to be sufficient but now Annual Reports cover a vast narrative of topics
      - Guidance on this, see p.188
      - The goal is to be open, honest and build trust with stakeholders
    - - No one-size-fits-all here
      - Examples on p.183