Just read a great article in the December 12, 2011 issue of Fortune magazine. The title of the article is “Is your Board Ready To Put Out The Next Fire?” While it is written specifically relating to corporate boards, the advice can certainly apply to non-profit boards as well.
The author, Faye Wattleton, starts out by asking what the chances are of a catastrophic earthquake striking Japan and crippling supply chains, or a volcanic-ash cloud covering much of northern Europe and disrupting air travel, or the failure of a major financial institution pushing the entire global financial system to the brink. “Until recently,” she states, “such scenarios would have been considered too far-fetched to warrant much attention…” However, she goes on to indicate that boards need to plan for risk the same way that they would plan for any other event.
“Typically boards have defined risks as strategic, operational, financial and compliance. That universe need to be widened to include intangible assets, such as a company’s [association's] reputation, or unpredictable vulnerabilities…”
The article goes on to say that risk management is essential to every board and the entire board needs to be a part of it.
Definitely a must read for board members od any organization. E-mail me if you would like a copy: sheila@totmgtsol.com
