Report of the NACD Blue Ribbon Commission on Adaptive Governance

In brief: The adjective “disruptive” in today’s business press is frequently associated with fast-moving developments related to advanced and emerging technologies. While the threats and opportunities related to new technologies are unquestionably significant, disruptive risks are not limited to these alone. Sources of disruptive risks may lie inside or outside of the organization. Some disruptive threats may be company-specific, some may be common to an industry sector, and others may affect all organizations nationally, regionally, or even globally. They could be “unknown unknowns,” or they could be familiar issues, but minimized or ignored–risks hiding in plain sight.

The 2018 Report of the NACD Blue Ribbon Commission on Adaptive Governance: Board Oversight of Disruptive Risks aims to help directors build proficiency in adaptive governance, a competency required in today’s fast-changing business landscape. The report includes a toolkit that provides sample documents, questions to inform discussions between the board and management, and other resources to help directors implement the report’s recommendations.

This resource can help your board to

• define adaptive governance;

• improve the board’s visibility of disruptive risks;

• position the company to better assess and mitigate untraditional risks;

• review disclosures and other communications to shareholders that describe the key factors that would make their investment risky; and

• guide how to turn uncertainty into an advantage.

Most relevant audiences: directors of public, private, and nonprofit organizations; audit committee members; risk committee members; CEOs and management teams; lead directors; committee chairs