2020 Strategic Risks for Boards

US companies face a variety of risks—both domestically and internationally—that are reshaping the world in which they do business. The board’s role in responsibly overseeing executive leaders’ management of the most significant risks has become increasingly complex.

“Resiliently” describes the way in which effective boards operate now. Rapid changes in the political and market environments require boards to clearly understand their organizations’ enterprise risks and opportunities. Boards should also consider reputational risk as a more significant risk than it has been in the past. A reputational risk is any risk that has the potential to produce negative publicity, change the public’s perception of the organization, or result in uncontrollable events that adversely impact a company’s reputation, thereby affecting its revenue.

When significant risks have been identified, the knowledge, skills, and abilities already present among board members can be matched to those risks and the board can attempt to fill any gaps in expertise. Having the right people, structure, and information in place enables boards to understand the risk profile and the risk appetite of the organization and allows them to ask probing questions of executive leaders.

This article written by Baker Tilly for the 2020 Governance Outlook: Projections of Emerging Board Matters, focuses on four key risks—mergers and acquisition (M&A), trade compliance, tax issues, and data privacy— and how boards can provide effective guidance and oversight related to each risk.

Download the report to learn more and review a series of questions for directors to ask around the issues of M&A, data privacy, international trade, and international and domestic tax consequences.

Improved governance ensures that boards remain prepared to provide oversight of critical risks for their management teams and overall strategy.