Until the start of 2020, organisations were aware of the impact that a pandemic could wreak on them, but they did not place it high on the probability scale. Neither was geopolitical risk high up on that scale as they entered 2022 – until the Ukraine-Russia conflict erupted in full force in February.
Gone are the days when a board reviewed its principal risks on an annual basis. Managing risk today must be a dynamic and continuous process – and on every board meeting agenda. It cannot be written up as part of an annual report and then put away for the rest of the year. And even in an otherwise great report, there is often too much focus on the short term and the downside of risk, to the exclusion of thinking longer term and about the opportunities that risk well managed can offer. The turbulence created by an increase in the severity and connectivity of risks is increasing and creating the atmosphere for a perfect storm.