NACD CEO to Members: We Are the Key to Transformation

Editor’s note: NACD CEO and president Peter Gleason addressed the audience of the 2018 NACD Global Board Leaders’ Summit on Sunday morning, September 30. What follows is a recap of his comments.

Take a moment and look around—at the person sitting next to you, or behind you. Take a moment to recognize the company you’re in. This is a very significant group of leaders. In this room we hold the means to positively influence virtually everything that affects our world.

We are the key to transformation.

We represent companies of all types: public, private, nonprofit, small, medium, large, mega. Our companies have the know-how, the access, the resources, the infrastructure, and the human capital to discover, design, and innovate to create products and services that can transform everything.

What we do can save lives, protect natural resources, improve education, feed the world, and promote human dignity for all.

There are relatively few of us, but the power here is remarkable. We guide and enable the companies we serve. We create jobs and drive the economy.

We’re also living in a transformative time. Movements have caught fire. Geopolitics and regulatory shifts have altered landscapes. Disruption abounds and innovation either threatens our businesses or beckons us to act. While we often talk about disruption, let’s talk about transformation and how we can use our unique influence to drive it.

In his 2017 letter to shareholders, Larry Fink warned that companies need to demonstrate a strategy for long-term value creation and that understanding a company’s effect on the world is a key component of that strategy. He wrote, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”

Even Dennis Whalen in the Harvard Business Review is commenting on a tighter connection between social capitalism and bottom-line performance, noting that “leadership from the boardroom is essential to making this happen.”

This movement toward transformation represents a convergence of culture, communities, capitalism, and growth, and it starts in the boardroom.

Rest assured that NACD is transforming, too.

We serve you, our members, with tools, insights, and resources—not just to keep you up to date with what’s going on, but to help you get ahead in these turbulent times. Many of our resources explore how people and culture drive company value. If your people are aligned with company values, you get greater performance. Lead the conversation around culture with management and then define your values as an organization. Be proactive with discussions rather than reactive to an event that may define your culture for you.

One element of culture that we’ve focused on for 20 years is diversity. NACD has charted a path toward more diverse and inclusive boardrooms. Simply put, diversity is not a nice to have, it’s a business imperative. And the time is now.

To put our words into action, NACD is unveiling the NACD NXT Initiative.

This is a multiyear initiative to equip boards to better navigate the challenges of the future. In the next decade, boards will be facing questions like these:

  • Where will the next generation of board leaders come from?
  • What skills will be imperative in terms of board composition?
  • How will they learn, network, and capitalize on opportunities?
  • What issues will rise to the top?
  • How will directors stay current in this dynamic and rapidly changing world?

Many of you were with us last night when we kicked off this initiative with a gala celebrating four companies that represent the kind of transformation we’re aspiring toward. They have not only recognized the importance of diversity and innovation but have also acted on it.

Please join me in congratulating the four winners:

  • Newmont Mining Corp.
  • Foot Locker
  • TrueBlue
  • Liberty Mutual Insurance

Finally, disruption is driving transformation. To survive and thrive in the face of disruption, we need to be adaptive to constant changes. This is the theme of this year’s Blue Ribbon Commission initiative. [You can read The Report of the NACD Blue Ribbon Commission on Adaptive Governance: Board Oversight of Disruptive Risks starting October 1 on our website.]

The opportunities and threats posed by disruptive forces and events have the potential to make or break an organization’s ability to generate sustainable long-term value. The transformation resides in our ability to perceive and respond to unforeseen changes happening around us.

In closing, I want to leave you with this:

  • It’s up to us.
  • We, the director community, are in a unique position of influence.
  • We are, indeed, the key to the transformation we are seeking.

I urge you to make the most of this Summit. Get out of it what you can—there truly is something for everyone. And continue to engage with NACD. We’ve got some exciting things ahead to help you lead with confidence and drive the transformation that our boards, our organizations, and our world needs today.

Thank you, and enjoy the next three days!

NACD Awards Four Corporate Boards for Advancing Diversity and Inclusion

And the inaugural NACD NXT winners are the boards of Foot Locker, Liberty Mutual Insurance, Newmont Mining, and TrueBlue. The announcements were made tonight at the NACD NXT Recognition Gala prior to the opening of the 2018 NACD Global Board Leaders’ Summit at the Marriott Marquis in Washington, D.C. The awards program was hosted by NACD in collaboration with Deloitte.

Peter Gleason at NACD NXT Gala

NACD CEO Peter Gleason speaks at the 2018 NXT Gala

“What if women and minorities had had a seat at the table 30 years ago?” Emily Chang, anchor of Bloomberg Technology and author of Brotopia: Breaking Up the Boys’ Club of Silicon Valley, said in her opening remarks as emcee of the awards ceremony. She suggested that including women and people of color in leadership roles could have stoked greater innovation at technology companies, but from the perspective of the end user experience, made for more inclusive online environments. “It takes corporate leadership and it takes board members to have those conversation because if we don’t have those conversations, the voices of women and minorities will be left out.”

The winners were selected from a pool of 25 corporate boards that were nominated by NACD members and then vetted by the NACD NXT steering committee. Those boards were then evaluated by a highly esteemed panel of 12 judges: Irene Chang Britt, Martin M. Coyne II, the Hon. Cari M. Dominguez, Daniel R. Hesse, Reatha Clark King, Lester L. Lyles, Kathi P. Seifert, Sonya F. Sepahban, Suzanne M. Vautrinot, Keith C. Wetmore, and Paul S. Williams.

The judges made their decisions based on written statements submitted by each nominated board that articulated: how the board, defined, developed, demonstrated, and achieved diversity and inclusion through measured steps; how the board addressed board recruitment and long-term value creation through a thoughtful recruitment process and in the face of disruptive forces; and how the board achieved a result deemed extraordinary in the context of diversity and inclusion.

And now, a look at the winners and the qualities that established them as exemplars of diversity and inclusion practices.

  • Newmont Mining Co. The large-cap gold and copper producer was chosen for its superior articulation of its values and the achievement of a wide-ranging diversity and inclusion program from the board level through its global corporate operation that includes metrics and goals for compensation, business resource groups, formal reporting and engagement, and an imaginative board “people policy”, all of which make it a standout in its industry. “This is what miners look like,” Newmont Mining Independent Chair Noreen Doyle said in her acceptance speech, joined on stage by two other women from the Newmont board. “Diversity is important from the top of the house to the face of the coal mine.”
  • Foot Locker. The 100-year-old mid-cap specialty athletic retailer was chosen for its devotion to diversity and inclusion, which is clearly systemic and strategic for the board, management, and operations. Foot Locker reports in its proxy statement that it believes that diversity of gender, race, ethnicity, age, viewpoints and experiences is in the best interest of their company, shareholders, and other stakeholders—and a winning strategy against a backdrop of a disruptive retail environment. “I think we’re doing good things and we need to do more,” the FootLocker representative said in his acceptance remarks. “We have had female representation since 1974 and our first African American director joined us in 1981. Thank you all and we appreciate the recognition.”
  • True Blue. This small-cap provider of specialized workforce solutions was chosen for having a truly broad definition of diversity and for leveraging cutting-edge tactics to intentionally diversify its work force with a goal of empowering workers, enabling the less advantaged worker and addressing disruption. True Blue’s efforts began at the board level, but extend to the C-suite and throughout every level of hiring. True Blue accomplished a total transformation and is, in the company’s own words, “healthier today because the board had the foresight and commitment to diversify.” A representative of the company made the following remarks in his acceptance speech: “TrueBlue has always been a champion of inclusion,” “Our board has made a real effort to reflect that diversity across our entire company.”
  • Liberty Mutual Insurance. The private global insurer was chosen for its high-level understanding and long-term commitment to diversity, both of which make them a role model for companies seeking to leverage diversity and inclusion to compete in an industry beset with disruption. Liberty Mutual Insurance is an excellent example of a company in a highly regulated business sector that has the business results to demonstrate the value of diversity. “We sought a board to outpace our competitors and capture the broadest array of talent,” a representative of the company said in his acceptance remarks. “We accept this award celebrating our progress and understanding that there is still much left to do.”

The NACD NXT Recognition Gala served as the formal announcement and kick-off of NACD NXT, a multi-year initiative designed to equip board directors to better navigate the rapidly changing business environment and challenges of the future. In addition to an annual awards ceremony that recognizes boards that demonstrate leading practices on this front, this initiative will provide case studies and practical tools to help directors and boards lead with confidence, and help prepare the next generation of board leaders through scholarship and education.

“On behalf of NACD and our selection committee, I want to congratulate these standout boards for their vision and commitment to diversity and inclusion,” said Peter R. Gleason, CEO and president of NACD. “Showcasing high-achieving and visionary boards is a key element in our effort to guide boards through a turbulent business environment to a successful future.”

For more information about the NACD NXT Recognition Gala, read the 2018 edition of The Power of Difference. For more information about the NACD NXT initiative, visit www.NACDonline.org/NXT.

NACD Awards Four Corporate Boards for Advancing Diversity and Inclusion

And the inaugural NACD NXT winners are the boards of Foot Locker, Liberty Mutual Insurance, Newmont Mining, and TrueBlue. The announcements were made tonight at the NACD NXT Recognition Gala prior to the opening of the 2018 NACD Global Board Leaders’ Summit at the Marriott Marquis in Washington, D.C. The awards program was hosted by NACD in collaboration with Deloitte.

Peter Gleason at NACD NXT Gala

NACD CEO Peter Gleason speaks at the 2018 NXT Gala

The winners were selected from a pool of 25 corporate boards that were nominated by NACD members and then vetted by the NACD NXT steering committee. Those boards were then evaluated by a highly esteemed panel of 12 judges: Irene Chang Britt, Martin M. Coyne II, the Hon. Cari M. Dominguez, Daniel R. Hesse, Reatha Clark King, Lester L. Lyles, Kathi P. Seifert, Sonya F. Sepahban, Suzanne M. Vautrinot, Keith C. Wetmore, and Paul S. Williams.

The judges made their decisions based on written statements submitted by each nominated board submit that articulated:

  • how the board, defined, developed, demonstrated, and achieved diversity and inclusion through measured steps;
  • how the board addressed board recruitment and long-term value creation through a thoughtful recruitment process and in the face of disruptive forces; and
  • how the board achieved a result deemed extraordinary in the context of diversity and inclusion.

And now, a look at the winners and the qualities that established them as exemplars of diversity and inclusion practices.

  • Newmont Mining Co. The large-cap gold and copper producer was chosen for its superior articulation of its values and the achievement of a wide-ranging diversity and inclusion program from the board level through its global corporate operation that includes metrics and goals for compensation, business resource groups, formal reporting and engagement, and an imaginative board “people policy”, all of which make it a standout in its industry. “This is what miners look like,” Newmont Mining Independent Chair Noreen Doyle said in her acceptance speech, joined on stage by two other women from the Newmont board. “Diversity is important from the top of the house to the face of the coal mine.”
  • Foot Locker. The 100-year-old mid-cap specialty athletic retailer was chosen for its devotion to diversity and inclusion, which is clearly systemic and strategic for the board, management, and operations. Foot Locker reports in its proxy statement that it believes that diversity of gender, race, ethnicity, age, viewpoints and experiences is in the best interest of their company, shareholders, and other stakeholders—and a winning strategy against a backdrop of a disruptive retail environment. “I think we’re doing good things and we need to do more,” the FootLocker representative said in his acceptance remarks. “We have had female representation since 1974 and our first African American director joined us in 1981. Thank you all and we appreciate the recognition.”
  • True Blue. This small-cap provider of specialized workforce solutions was chosen for having a truly broad definition of diversity and for leveraging cutting-edge tactics to intentionally diversify its work force with a goal of empowering workers, enabling the less advantaged worker and addressing disruption. True Blue’s efforts began at the board level, but extend to the C-suite and throughout every level of hiring. True Blue accomplished a total transformation and is, in the company’s own words, “healthier today because the board had the foresight and commitment to diversify.” A representative of the company made the following remarks in his acceptance speech: “TrueBlue has always been a champion of inclusion,” “Our board has made a real effort to reflect that diversity across our entire company.”
  • Liberty Mutual Insurance. The private global insurer was chosen for its high-level understanding and long-term commitment to diversity, both of which make them a role model for companies seeking to leverage diversity and inclusion to compete in an industry beset with disruption. Liberty Mutual Insurance is an excellent example of a company in a highly regulated business sector that has the business results to demonstrate the value of diversity. “We sought a board to outpace our competitors and capture the broadest array of talent,” a representative of the company said in his acceptance remarks. “We accept this award celebrating our progress and understanding that there is still much left to do.”

The NACD NXT Recognition Gala served as the formal announcement and kick-off of NACD NXT, a multi-year initiative designed to equip board directors to better navigate the rapidly changing business environment and challenges of the future. In addition to an annual awards ceremony that recognizes boards that demonstrate leading practices on this front, this initiative will provide case studies and practical tools to help directors and boards lead with confidence, and help prepare the next generation of board leaders through scholarship and education.

“On behalf of NACD and our selection committee, I want to congratulate these standout boards for their vision and commitment to diversity and inclusion,” said Peter R. Gleason, CEO and president of NACD. “Showcasing high-achieving and visionary boards is a key element in our effort to guide boards through a turbulent business environment to a successful future.”

For more information about the NACD NXT Recognition Gala, read the 2018 edition of The Power of Difference. For more information about the NACD NXT initiative, visit www.NACDonline.org/NXT.

10 Considerations Before Choosing an Executive Coach

What functional backgrounds do most Presidents and CEO’s come from? Today many come from the finance area. In the past, they often moved up from sales and marketing, followed closely by operations. No matter which functional area the CEO comes from, he or she had better have a strong understanding of financial issues.

Cost control, treasury, cash management, financial restructuring, raising capital and banking relationships are just a few of the more important areas of concern a CEO will need to address. But a mastery of the CFO’s role or any other functional role does not guarantee success when ascending to the CEO’s position.

The best route to the CEO role is to have exposure to all functional areas of the company in a meaningful fashion. Staying close to other functional leaders is critical to rounding out your own experience. This involves networking on a regular basis with other functional leaders and with the rest of the management team.

If for example you have no experience in sales and marketing, spend as much time as you can to learn what they are doing, why they are doing it, and how they are executing on their plans. Take advantage of every opportunity to gain new experience outside your comfort zone particularly if it involves exposure to foreign markets. While most people work on improving their technical skills and gaining “real life” experience, don’t forget about your people and management skills and even becoming comfortable with public speaking.

Probably the most utilized assistance people are seeking today to help get them to the next level is an executive coach. Even if you hold the title of CEO, a coach can help hone your skills.  The comments I repeatedly hear from new CEO’s are “It’s lonely at the top. I used to share my thoughts with my peers but now that I’m the CEO, there are certain issues I can’t share with anyone internally.” If you’re considering an executive coach or approaching your boss or the board to retain executive coaching services, here are a few thoughts for your consideration:

  1. When selecting a coach, pay close attention to the process the coach uses and the types of outcomes he/she has had in the past.
  2. Make sure the process includes extensive assessments. It’s important for you to understand your strengths. It’s equally important to know how to navigate around your weaknesses.
  3. Try to choose a coach who has some of the same functional experience you have so he/she can easily identify with some of your issues.
  4. Make sure the coach has experience and understands business strategy.
  5. While a coach needs to be a good communicator, the individual probably needs to be a better listener, capable of challenging your assumptions
  6. Do some research to determine if the coach has been part of the management team and contributed to the visioning of a company.
  7. While you are not looking for a friend, you should feel comfortable enough with your coach to let your guard down and reveal some of your concerns, discomforts and insecurities.
  8. You may not always agree with your coach, but should respect their opinion and give it careful consideration.
  9. Early in the process, establish some outcomes that you both agree on that will make a difference, can be measured, and will benchmark your coaching experience.
  10. A coach is not a psycho-analyst. However, an executive coach will help you become better at whatever you are striving to be, recommend approaches to business situations and personal development, and boost your confidence so you are ready for the next level.

 

By Dan Portes, Chairman and CEO of Management Resource Group, a Career Partners International Firm

The post 10 Considerations Before Choosing an Executive Coach appeared first on CPIWorld.

10 Considerations Before Choosing an Executive Coach

What functional backgrounds do most Presidents and CEO’s come from? Today many come from the finance area. In the past, they often moved up from sales and marketing, followed closely by operations. No matter which functional area the CEO comes from, he or she had better have a strong understanding of financial issues.

Cost control, treasury, cash management, financial restructuring, raising capital and banking relationships are just a few of the more important areas of concern a CEO will need to address. But a mastery of the CFO’s role or any other functional role does not guarantee success when ascending to the CEO’s position.

The best route to the CEO role is to have exposure to all functional areas of the company in a meaningful fashion. Staying close to other functional leaders is critical to rounding out your own experience. This involves networking on a regular basis with other functional leaders and with the rest of the management team.

If for example you have no experience in sales and marketing, spend as much time as you can to learn what they are doing, why they are doing it, and how they are executing on their plans. Take advantage of every opportunity to gain new experience outside your comfort zone particularly if it involves exposure to foreign markets. While most people work on improving their technical skills and gaining “real life” experience, don’t forget about your people and management skills and even becoming comfortable with public speaking.

Probably the most utilized assistance people are seeking today to help get them to the next level is an executive coach. Even if you hold the title of CEO, a coach can help hone your skills.  The comments I repeatedly hear from new CEO’s are “It’s lonely at the top. I used to share my thoughts with my peers but now that I’m the CEO, there are certain issues I can’t share with anyone internally.” If you’re considering an executive coach or approaching your boss or the board to retain executive coaching services, here are a few thoughts for your consideration:

  1. When selecting a coach, pay close attention to the process the coach uses and the types of outcomes he/she has had in the past.
  2. Make sure the process includes extensive assessments. It’s important for you to understand your strengths. It’s equally important to know how to navigate around your weaknesses.
  3. Try to choose a coach who has some of the same functional experience you have so he/she can easily identify with some of your issues.
  4. Make sure the coach has experience and understands business strategy.
  5. While a coach needs to be a good communicator, the individual probably needs to be a better listener, capable of challenging your assumptions
  6. Do some research to determine if the coach has been part of the management team and contributed to the visioning of a company.
  7. While you are not looking for a friend, you should feel comfortable enough with your coach to let your guard down and reveal some of your concerns, discomforts and insecurities.
  8. You may not always agree with your coach, but should respect their opinion and give it careful consideration.
  9. Early in the process, establish some outcomes that you both agree on that will make a difference, can be measured, and will benchmark your coaching experience.
  10. A coach is not a psycho-analyst. However, an executive coach will help you become better at whatever you are striving to be, recommend approaches to business situations and personal development, and boost your confidence so you are ready for the next level.

 

By Dan Portes, Chairman and CEO of Management Resource Group, a Career Partners International Firm

The post 10 Considerations Before Choosing an Executive Coach appeared first on CPIWorld.

Four Critical Questions on Cybersecurity for 2019 Planning

Believe it or not, it’s almost 2019—and that means it’s time to develop strategy and processes for the coming year. As your board begins this important process, how are your plans incorporating cybersecurity, including existing and emerging cyber-risks?

As your board begins planning and budgeting for 2019, how are you incorporating these third-party risks? Four important questions can provide a valuable roadmap for cyber risk oversight: 

1. What is our current internal security performance? Security ratings provide key performance indicators on a company’s security operations, thus providing board members transparency and visibility into an organization’s security posture. To effectively understand the impact of security programs and communicate changes to key decision-makers, companies need tools that provide a quantified, comparative view of cybersecurity performance over time. A clear picture of a company’s security posture helps boards assess the effectiveness of the internal security and risk programs already in place.

2. How does our security performance compare to industry peers? While other corporate functions have embraced benchmarking as a way to compare performance, risk and security teams are often left in the dark. Traditional tools for network security are unable to compare security performance against industry averages and peers. By looking at a company’s cybersecurity performance in relation to peers and actionable high-level security performance metrics, organizations have been able to clearly demonstrate program improvements and advocate for increased cybersecurity resources. Security ratings serve as an actionable metric that allows your organization to communicate security progress and key indicators more effectively.

3. How are we managing third-party risk? It’s important for boards to prioritize third-party, or vendor, risk within their organization. Given that last year 56 percent of companies were affected by a third-party data breach, this is becoming absolutely critical. Businesses can partner with hundreds or even thousands of vendors that they engage with almost daily. If those companies possess sensitive information, it’s critical that their networks are readied for potential attacks as well. This is because hackers are now attacking larger organizations through these smaller vendors. They know that other, smaller organizations may not have the bandwidth to guard against these bad actors.

This trend truly highlights the importance of continuously monitoring your vendors. Tools such as my company’s Security Ratings help organizations do just this every single day, assisting them in building and adjusting their vendor risk management program at the speed and growth of their business. Overall, understanding third-party risk in a real, quantifiable way helps organizations keep their network safe. Boards should expect to receive regular updates from security teams about the security performance of their critical vendors.

4. How effective is our security spending? As the year comes to a close, board members should thoughtfully consider budgeting for security in the year ahead. While it’s great to end the last quarter of the business year on a strong note, it’s even more critical for businesses to set internal teams up for success when returning to work in January. One of the best ways to accomplish this is to be strategic about the extra budget the organization possesses in Q4, asking: How can my organization be mindful about spending extra funds to benefit our security program going forward?

Security and risk professionals must identify, quantify, and mitigate risk across their organization and ecosystem. A primary way to do this is with security ratings, which support their security program and their vendor risk program by helping assess both internal and third-party security performance, as mentioned above.

Your board is more involved in cybersecurity strategy and planning than ever before. Ensure that your company is setting off on the best footing for 2019 by applying these principles to your next board meeting and feeling greater peace of mind that your company can weather whatever comes in the year ahead.

Culture, Tone at the Top Lead to Boardroom Resilience

Most risk information presented to the board is “just not getting to the point.” This was one of the clear messages from research conducted four years ago by Marsh & McLennan Companies, the Association for Financial Professionals (AFP) and the NACD. Yet discussions among commissioners for this year’s forthcoming NACD Blue Ribbon Commission report, which will be released at the organization’s Global Board Leaders’ Summit in October, highlight directors’ continued frustration with corporate risk management—especially with respect to the threats posed by disruptive risks.

With the prospect of generating significant discontinuities and disturbances—and stemming from political, technological, or other forces—these risks may profoundly compromise key strands of a firm’s commercial activity and possibly even curtail the viability of the entire enterprise.

If the prospect of a single disruption is problematic enough for business leaders, the continued turbulence that characterizes the business environment of today can sap decision-making. It’s hard to sift substance from froth in terms of key warning signals, and according to a 2018 report by Marsh & McLennan Companies’ Global Risk Center, it may be even more difficult to know how and when to respond at a time of high uncertainty or constant change.

Information deficits and analytical challenges complicate the task of bringing together external data points with planning assumptions and operational exigencies. But cultural and institutional factors within firms can also inhibit receptivity and responsiveness to new threats by executives and directors alike.

Against this backdrop, boards must help set a tone from the top by making engagement with potential disruptions a clear governance responsibility. Three imperatives stand out.

  1. Ensure that the firm’s approach to anticipating potential disruption is an energetic, explorative endeavor. This means investigating hot topics in the world or fundamental trends that may shock or gradually undermine a firm’s growth, profitability, and business model. Doing this effectively requires triangulating an array of different perspectives and asking “what-if” questions to keep the focus on possible consequences rather than likelihood. Characterizing the dynamics of disruptive forces and delineating touchpoints to the business helps determine where impacts might be felt and how material they might be, while well-crafted scenarios act as a tangible frame for detailed analyses and stress-testing.
  2. Actively participate in this exercise and promote its use. Directors need to ask hard questions about key concerns, share the wisdom they have gleaned from different places, and appreciate divergences of opinion in searching discussions. They should be mindful of blind spots and vested interests, and be sensitive to an over-reliance on sources of information that reflect the prevailing corporate view. While exercising an appropriate challenge function, they should acknowledge that that analyses may necessarily draw on patchy data and conflicting evidence. Historic disruptions may be weak reference points for preparing for future disruptions in terms of both the scale and nature of the impact.
  3. Be prepared to make bold decisions in a timely manner. Investigations into priority concerns need to inform strategy reviews and broader governance decisions. If the work is sidelined because the results are inconvenient, then the process has been a waste of time. Given high levels of uncertainty associated with emerging disruptions, it’s likely that business cases for action won’t be as watertight as might be desired. Sometimes the most appropriate response is radical (business model change, large investment in innovation, market withdrawal); more often it will be ensuring broad-based resilience to a range of potential negative incidents. As many forces of disruption can neither be forestalled nor bought off, enhancing strategic agility, boosting crisis preparedness, and improving the speed of operational response are often the most viable solutions.

To fulfil their responsibilities properly, directors must look carefully both at themselves and at senior management. Boards not only need good intelligence on disruptive risks and the right forum for discussing early warning signals and strategic implications; they also need a modicum of creative friction that prevents groupthink. Likewise, they need to see a chief executive who is not adhering to last year’s strategic assumptions or risk assessments and a chief risk officer with sufficient business acumen and communication skills who can champion this agenda and exercise a suitable challenge function with executive colleagues. This provides a strong cultural starting point for the board while it is overseeing how management navigates business opportunities in a fast-changing world.

Alex Wittenberg is executive director of the Marsh & McLennan Companies Global Risk Center and is recognized by NACD as a Governance Professional honoree of the NACD Directorship 100.