There are several problems that a board of directors risks falling into. This is the first in a series.
Trap
Believing that the past predicts/guarantees the future
It is tempting for a board of directors to rely on the organization's past successes in the belief that they automatically guarantee future success. However, this trap can lead to dangerous complacency, neglecting market changes, technological developments and new trends that could impact the organization.
Risk
Facing unpleasant surprises or having to manage situations that can threaten the organization
By neglecting the analysis of potential risks and relying solely on past achievements, the board of directors runs the risk of finding itself faced with unforeseen events that could jeopardize the organization. These unpleasant surprises can come from various sources such as regulatory changes, internal or external crises, or increased competition in the market.
Trick
Monitor the identification and ensure management of the main risks facing the organization
A key tip to avoiding these pitfalls and risks is to have a rigorous risk identification and management process in place. The board of directors must ensure that the main risks to which the organization is exposed are regularly assessed, analyzed and proactively addressed. This makes it possible to anticipate potential threats and put action plans in place to mitigate them.
Impact
Allows the Board of Directors to be aware of potential threats and take steps to mitigate them, thereby ensuring that the organization operates within its legal and ethical framework
By closely monitoring the identification and management of risks, the board of directors can guard against potential threats and take preventative measures to avoid situations damaging to the organization. This proactive approach ensures that the organization operates in compliance with its legal and ethical framework, while promoting its sustainability and good governance.
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Julie Léger , GPC.d
Alain Vachon , GPC.d
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