Prepare for the Next Board Meeting: Consider 3 Questions

As 2021 comes to an end, many organizations are winding down another hectic year, and planning for 2022 with much more optimism. There is a high level of uncertainty ahead, but the as the economy continues to recover and opportunities develop, boards and management will be busy this season planning for the New Year.

Weaver, knowledgeable in advisory services, offers several topics to incorporate into your next board meeting to generate productive discussion and guarantee preparedness for any emergency scenario. The following five questions can serve as a guide for your next board meeting, helping to secure your organization’s future from the possible risk the future holds.

1. How effectively are we managing universally significant risks that will be most relevant in 2022?

With today’s ever-changing economic climate, it is difficult for board members and management to accurately predict for future conditions and risks. Staying abreast of economic recovery trends and political, economic and other risk drivers and their short-and long-term implications are essential.

The Institute for Internal Auditors (IIA) published its third annual OnRisk report, which identifies twelve key risks likely to be universally critical to organizations in the upcoming year. In addition to a detailed look at the greatest challenges expected in 2022, the report discusses how the three key players in an organization’s risk management align (or misalign) in their view of these risks.

Here are some questions to consider about how your organization is approaching the most significant risks in the year ahead:

• Are board members, executives and auditors aligned in their understanding of the key risks facing our organization?
• Of the 12 risks identified in OnRisk 2022, which are most critical to our operations?
• How are we addressing these risks in our organization?

2. How significantly are supply chain disruptions affecting our operations?

The coronavirus continues to evolve and change, creating and recreating more concerns and challenges. Supply and demand imbalances, bottlenecks and other issues have contributed to inflation as consumers react to the effects of the pandemic. Unpredictability is the norm as organizations struggle to adapt to the effects of supply chain disruptions and lack of product.

The following questions should be considered when addressing the issue of supply chain disruptions and inflation:

• How are supply chain disruptions affecting our company’s operations?
• Have they resulted in extended lead times for materials and supplies? Have we investigated how to obtain materials and resources we need available through other channels?
• Are we prepared for inflation and other possible effects of supply chain disruptions on our business?
• Have the impacts of current supply chain challenges been evaluated holistically for the company? How is this impacting your key vendors and business partners?

3. What was the process for developing the budgeting for the upcoming year?

As part of its oversight and governance role, the Board is responsible for reviewing the company’s annual budget. The advanced levels of uncertainty in the current business climate make the budgeting process even more difficult for management.

Prior to approving, the Board should be sure to understand:

• What changes were made in the budgeting process for 2022, compared to prior years?
• What is management’s confidence level with the budget presented and where do they think it may be a stretch, high or low?
• Are there new initiatives or investments planned in the upcoming year and how were they evaluated?
• What other goals has the company set for the short-term and does the budget support these goals?

4. What steps has the organization taken to evaluate the risk associated with Social Media, used both by the organization and employees?

Today, most companies have some sort of social media policy. But even if an organization has a policy, enforcing it can be a challenge and companies struggle to respond when things go wrong. For example, if company employees post operational-related or inappropriate content to their personal accounts, the integrity of business operations may be compromised and the organization may be subject to legal risks. It is difficult to prevent social media incidents, but an adopting and following a social media policy can help limit any damage to your company’s reputation.

As you consider your organization’s governance around social media, ask these questions:

• How is the policy communicated to employees?
• Is training or some sort of education provided?
• Have there been any instances or noted violations of the organization’s social media policy?
• What were the consequences?
• Do we have a social media crisis response plan in place should an incident occur?

5. Does our organization have a position on cryptocurrency?

With cryptocurrencies continuing to grow in popularity, many organizations are beginning to consider whether to get involved and where to begin. Topics such as regulation and compliance, financial reporting, taxation, and information technology considerations may arise.

Here are some questions to explore cryptocurrency and your organization:

• Is it realistic to consider the use of cryptocurrency in our organization?
• If so, do we have the right systems in place to manage risks and opportunity costs?
• Is internal audit prepared to offer assurance over the adoption and use of cryptocurrency?

Weaver offers information and insights to prepare for your next board meeting. We can help you ask the right questions and determine appropriate plans of action based on topics and trends as they unfold. Subscribe to our monthly insights for articles and information to help you review your organization’s operations and prepare for change in an uncertain world.

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Greet the Quarter by Asking these Five Questions at Your Next Board Meeting