Read this in The Manila Times digital edition.
ANNUALLY, board directors are required to go through refresher courses on good corporate governance. I recently completed mine, managed by the Institute of Corporate Directors. We discussed risk, a subject matter that all of us in today's increasingly VUCA (volatile, uncertain, confusing and ambiguous) environment must be on top of. There are all kinds of business risks: operational, financial, reputational, compliance and strategic.
Operational risks range from behavioral, competence, fraud, data leaks, controls and processes to accidents. Financial risks pertain mainly to credit, interest rates, liquidity, pricing, foreign exchange and transactions. Reputational risk covers a broad range: loss of revenue, loss of business partners, employee turnover, and loss of trust and confidence from the board and stakeholders. Compliance risk pertains to potential exposure to legal penalties, financial forfeiture and material loss arising from legal, policy and ethical failures. Strategic risk is about potential failures in strategic planning that may prevent the attainment of core objectives.
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