GCC boards identify risk management as key issue in company governance

Following the last financial crisis and with the current economic climate, companies have been paying more attention to risk management. Boards play a crucial role in risk oversight, however, not enough board directors in the Gulf region are aware of and have clear visibility on the top risks facing the company according to the GCC Board Directors Institute (BDI)’s recent survey on board effectiveness. 

BDI conducted its Mastering the Board Workshop in Riyadh on 24-25 November in partnership with J. P. Morgan. The two-day program focused on four pillars of high-performing boards;  Risk management, the role of the Chairman, strategy and succession planning.  David Beatty, Conway Director- Clarkson Centre for Business Ethics & Board Effectiveness and Professor of Strategic Management at the Rotman School of Management along with Peter Breen Partner emeritus & Chair of the Middle East Practice & member of the EMEA CEO & Board of Directors Practice at Heidrick & Struggles were among the leading faculty.

“With low oil prices and regional instability applying pressure on company profits and performance, risk management is an essential component of an effective board. This master class addresses a fundamental objective of the Institute which is to help build board member effectiveness and capabilities through the sharing of best practices and experiences,” said Nathalie Potvin, Executive Director of BDI.

“Our research signals that some boards in this region may need to focus on developing their capabilities in the area of risk management,” Ms Potvin says. “Boards are responsible for understanding the company management’s approach to risk and should take part in the discussions about risk and risk strategy. Our message to GCC Boards is that they need to be proactive in ensuring that the company’s risk approach is adequate and effective.” 

On the eve of the workshop, Mr. Mutlaq Al-Morished, CEO of TASNEE and BDI Governor addressed some of BDI’s alumni and workshop participants in regards to the role of the board versus the role of management. Building a strong board - defining the boundaries between Board and Management is part of building a strong board - is an ongoing activity which requires time and hard work from the Board and Management.

The workshop offered seasoned board directors the opportunity to learn from each other and through the analysis of current case studies. The next Mastering the Boardroom workshop will take place next November in Dubai.