Boards fail to discuss external reports to better understand emerging risks

Most boards fail to look outside their own organisation to stay abreast of the implications of emerging risks, a new report by AIG has found.

Technology risk is a concern for 74% of large companies surveyed by AIG. Furthermore, 83% of senior business leaders are ‘very’ or ‘fairly’ concerned about technical vulnerability. Service providers are nearly twice as likely as industrial businesses (42% versus 27% respectively) to be ‘very concerned’ about technological vulnerability.

Nonetheless, companies very rarely discuss external views on technological disruption within the boardroom. Only 28% of companies surveyed ‘always’, or ‘more often than not’, discussed reports from third party experts about the implications of emerging risks to the company and their business sector – with 50% discussing reports from third party experts ‘less often than not’, ‘once a year’ or ‘never’.

“Listening to external views and taking on third party intelligence can only be beneficial to discussions happening at board level” said Charlie Kitson, head of UK client engagement. “The business landscape is increasingly being shaped by non-traditional, non-physical risks – risks that cause disruption in ways we cannot always predict. Understanding this external landscape is a key role for any board and they need to be asking themselves ‘are we future focused enough?’”