Video series: Risk and governance implications of COVID and beyond w/e 3 April 2020

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Different times call for a different response – Week 2

Thanks for the overwhelming support for the LinkedIn video series that I’ve been doing with Tom McLeod, an experienced Chief Auditor and Chief Risk Officer and long time TDA client.

We’ve been humbled by the extraordinary support and feedback, including from people we respect greatly. This is indicative of the need for information, clarity and leadership during uncertain times.

Each video is around 4 minutes long and unpacks 3-5 key issues. Each contains 2-3 take aways to help you get clarity and take action.

The week’s LinkedIn Videos are included below.

I hope you find them useful in working out how to lead during challenging times and as an ongoing resource. If you find them useful please pass them on.


Monday 30th of March
Recap of last week.
Assurance on the basics, beware of false dawns, malicious activity

Key points:

  • Be careful of false dawns – a couple of times country statistics have shown a temporary downturn only to result in the following period in increase and a potential second wave. Relevant to how you manage your expectations within your organisations and readiness.
  • On Monday we stressed the importance of impact scenario analysis up to worst-case scenarios on strategy, operations, resourcing and finance.
  • On Tuesday we discussed the heightened activity and exposure on cyber risk during moments like this and hardening IT and comms.
  • On Wednesday we noted that principal risks are enduring and the need to get them on a single page for each horizon. Horizon 0, horizon 1 and horizon 2.
  • On Thursday we discussed the importance of the basics during moments like this and the heightened risk of fraud.
  • On Friday we discussed some of the extraordinary upside and innovation that we’re already seeing with the customer at the centre and coming together of people.

Watch the video here.


Tuesday 31st March 2020
Role of the board, board committees in a crisis

Key points:

  • EOs of large multinationals have told their staff to avoid the usual April Fool’s day pranks, to avoid misinterpretation. Safety-critical comms are always important. Arguably a lot of things are now safety-critical comms that previously weren’t.
  • Boards / Board Committees traditionally have an oversight responsibility. In a crisis – that should not necessarily change. An oversight function remains critical and they still will have roles in decision making.
  • Specifically, the role of Audit and Risk Committees · Statutory obligations continue – even if deadlines have been delayed by regulators.
  • Be a filter for information that needs to go to the Board on the crisis – what exactly is it that the Board needs to know/approve?
  • Meet on a frequency that makes sense for the organisation. If you can’t add value, sometimes the way to add value is to stand aside.

Watch the video here.


Wednesday 1st April 2020
Risk management in periods of extreme change

Key points:

  • Massive breakthroughs in innovation. Last week we mentioned collapses in product adoption curves. In recent days and weeks we’ve seen telehealth adopted as a mainstay. As one commentator said recently “we’ve seen in 10 days what would normally take 10 years”.
  • Consider whether risk management is an enabler or blocker. A blocker would say that these things can’t be done. An enabler would move at the speed of innovation and be embedded into the process, not to ask whether these things can be done, but how they can be done most safely within the required time period.
  • This is the time to be alongside and helping get those decisions right as best as possible, and logging what needs to be revisited later.

Watch the video here.


Thursday 2 April 2020
Managing fatigue and succession planning in extreme circumstances

Key points:

  • Wimbledon is the only one of the four major tennis tournaments that have in place pandemic insurance – cancellation coverage in the event of a pandemic. The time is now to review your insurance / risk financing profile.
  • Who would take over from the CEO / CFO etc if they were ill with coronavirus and couldn’t operate in the short to medium term? What would you do if a whole section of your workforce came down with coronavirus?
  • Management of fatigue during this period is critical. Your ability to function and make proper decisions diminishes the longer that you are operating at high-stress levels. An organisation that keeps the same team in place throughout an extended crisis is not managing the risk of the crisis well.
  • You don’t have the luxury of time so it will need to be a flexible approach that can be adjusted as events unfold.

Watch the video here.


Friday 3rd April 2020
Wellbeing, being aware of mindsets, helping others, weekend reset

Key points:

  • Periods of rapid change can be stressful.
  • We all cope differently and default to our own patterns.
  • Is your current pattern exaggerated right now? And is that helpful?
  • If someone is reacting in whatever way, it might be a sign of stress.
  • Rather than getting caught up in the reaction, it’s a good time to pause and ask how could you be really helpful to them right now – in deeds or just as someone to talk to.
  • Gratitude helps. And weekends are a great time to step back and reset.

Watch the video here.


Priority actions

In this month’s series we touch on a range of issues – too many to summarise here, but two that we’d like to highlight.

Staying oriented during massive disorientation

Everyone is experiencing dislocation and disruption in some form right now – right throughout your organisation and entire value chain.

Most pressing is the need for your governance and leadership teams to stay oriented and make good decisions.

Keeping everyone oriented at the governance and leadership layers has never been more important, particularly as information and risk profiles evolve daily as new information comes to hand.

The different prisms and disciplines of strategy, risk, assurance, performance must come together. These can’t be siloed discussions, information sets or slow long-form reports. More importantly, information must be constantly up to date and can’t be in lag. We cannot stress this enough.

For this, we recommended simple visual tools on a single page in a form that makes the most sense for your apex leaders. We discuss various forms and aspects in the video series.

Each of these should have a multi-horizon view:

  • Horizon 0: Emergency management phase
  • Horizon 1: BAU – standing down, maintaining a degraded environment for an extended period and standing back up
  • Horizon 2: The re-imagined business that might be different from the one that you stood down.

If your governance, risk and assurance approaches aren’t integrated and allowing for constantly oriented decision making this needs a focused intervention right now. If you need help refining or reviewing your approach please get in touch.

Risk and assurance going through a rapid refresh

Like all disciplines, risk and assurance teams around the world are reinventing themselves by 10-30%.

Like everything right now, it’s important that the approach is right for right now, and then fit for purpose going forward.

It’s really important that your risk and assurance teams are “running alongside the fire front” while also having an eye on the three horizons listed above.

In this space, there are a number of approaches emerging as better practice. Some are not new. Others are a major flip from conventional thinking over the last 2 decades.

If your risk and assurance teams aren’t top of mind or supporting your apex leaders to lead effectively during COVID they’re probably not fit for purpose and need rapid intervention.

Again, if you need help working out how to tackle this or optimising your approach, we can help – either in setting direction or helping your teams to focus and lead effectively.


End of week Zoom hookup

Tom and I have started hosting weekly coffees over Zoom as a way for people to come together, hear what others are seeing and doing and to reset for the weekend.

In the pilots during April we’ve had a cross section of audit and risk leaders from around the world join in and share their thoughts and challenges. They’ve been great calls, and arguably some of the best professional development that I’ve been able to access during this intense period.

We’ll be holding these every Friday at 2pm Australian Eastern Standard time for 30 minutes. If you’d like to come along and share, ask a question or listen, or would like to send someone from your team, please feel free. Contact me for details.


We’re here to help

Todd Davies and Associates was formed in the wake of the global financial crisis. We’ve been getting ready for a moment like this for more than a decade.

If you need help getting something in place, would like to test your thinking or just need some additional leadership capacity, clarity or sharpness, this is what we can do. Call us.

Similarly if you are a service provider to the risk and assurance community in whatever form – we have 20+ years experience in business model disruption and innovation in this segment. Few know it better than we do, and almost none have a comparable track record in product and business model innovation in this segment. We can help.

Take care, let’s look out or each other and looking forward too seeing you soon.

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Todd


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