Adaptive Governance: Board Oversight of Disruptive Risks

Adaptive Governance: Board Oversight of Disruptive Risks

Build Your Board's Situational Awareness

The opportunities and threats posed by disruptive forces and events have the potential to make or break an organization’s ability to create long-term value. These issues need to be front and center on board agendas. Still, many boards are behind the curve: almost half of directors in an online NACD poll said their board’s tendency to focus on known risks (those that management has already identified) creates a major barrier to the board’s ability to oversee disruptive risks, and less than 20 percent expressed confidence in management’s ability to address risks in this category.  The 2018 NACD Blue Ribbon Commission initiative aims to help directors in all organizations improve their oversight of disruptive risks and strengthen their stewardship of long-term value creation in a fast-changing world.

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Select Recommendations

  • Improve the visibility of disruptive risks in boardroom discussions.
    Risk reports should provide forward-looking information on changing conditions, including from sources outside the company.

  • Evaluate how well board culture supports oversight of disruptive risks.
    Consider how bad news is received and the board’s level of openness to nontraditional points of view.

  • Assess board composition and skill sets.
    Diverse boards that engage in ongoing learning activities are essential in a fast-changing, disruptive environment.

  • Devote board agenda time to deep dives on disruptive risks.
    Explore the use of scenario planning, simulations, and stress testing to provide input to these discussions.

The 2018 NACD Blue Ribbon Commission

  • Sue Cole
    SAGE Leadership & Strategy; Director, Biscuitville Inc., Diversified Trust, Martin Marietta Materials, NACD

  • Kelvin Westbrook
    Director, The Archer Daniels Midland Co., Camden Property Trust, Mosaic Co., T-Mobile
  • Maureen Breakiron-Evans
    Director, Cognizant Technology Solutions, Ally Financial, Cubic Corp.
  • Ian Bremmer
    Eurasia Group
  • Stephen Brown
    KPMG Board Leadership Center
  • Irene Chang Britt
    Director, Brighthouse Financial Inc., Dunkin' Brands Group Inc., Tailored Brands Inc., Baybridge Senior Housing Inc.
  • Nora Denzel
    Director, Advanced Micro Devices, Ericsson, Talend
  • Nick Donofrio
    Director, Aptiv PLC, HYPR Corp., the New York Genome Institute, the MITRE Corp., NACD, Ravenpod Inc., Quantexa Ltd., Sproxil Inc., Syracuse University
  • John Drzik
    Marsh Global Risk and Digital, Marsh & McLennan Companies
  • Bill Easter III
    Director, Concho Resources Inc., Delta Airlines Inc., Grupo Aeroméxico SAB de CV
  • David Flaschen
    Director, Informa PLC, Paychex Inc.
  • Peter Gleason
    NACD; Director, NACD, Nura Health Inc.
  • Holly Gregory
    Global Corporate Governance & Executive Compensation Practice, Sidley Austin LLP
  • Lee Hanson
    Heidrick & Struggles
  • Karen Horn
    Director, Simon Property Group, National Bureau of Economic Research, US-Russia Foundation for Economic Development and the Rule of Law, NACD
  • Dennis Kass
    Director, The Wendy's Co., Lockheed Martin Investment Management Co. (Advisory Board)
  • Jannice Koors
    Pearl Meyer
  • James Lam
    James Lam & Associates; Director, E*TRADE Financial, RiskLens Inc.
  • Sara Mathew
    Director, Campbell Soup Co, Fannie Mae, Shire PLC, State Street Corp.
  • Mary Pat McCarthy
    Director, Andeavor, Palo Alto Networks Inc.

Media Coverage

Knowing the Unknown Disruptive Risks 
Directors & Boards

Adapting to Future Trends
NACD Directorship

How boards can better manage disruptive risks
Financial Management

What Comp Committees Should Be Asking but Aren’t

About NACD's Blue Ribbon Commission Reports

Our Blue Ribbon Commission Reports (BRCs) are NACD’s annual signature publications that propose new principles and practices to address the most critical boardroom issues.  Read more about the history and impact of the BRC report series here.