Nineteenth International Conference on Knowledge, Culture, and Change in Organizations

Abstract

External events such as technological development, regulatory change or public scandals are easy to observe, but what is much more difficult to see is how corporate boards are responding to the risk management challenges presented by these events. In order to investigate strategic risk decision making in the boardroom this current study employed 30 semi-structured interviews with Executive and Non-Executive directors of FTSE 100-350, SME, and third sector companies. The themes uncovered from this approach were then triangulated with 2 focus groups of industry based subject matter experts in order to determine the validity of our results to a wider corporate audience. Our results highlighted that the presence of risk diversity on a board, those skills, knowledge, expertise, education and training around risk that ensure a board remains risk intelligent is crucial to effective strategic decision making within the boardroom. Further, boards find it hard to understand and address the culture of risk taking by employees within an organisation, due to a lack of guidance and difficulty in connecting culture to organisational performance both at the operational and strategic level. This is further exacerbated by time pressured boards operating in complex and dynamic environments that find it hard to place risk in a positive context. However, our research has indicated that those corporate boards who do make connections between their organisation’s strategy and risk management decisions can reap significant rewards.