In a world filled with uncertainty, boards need to focus on connecting dots

Regulators and investors increasingly say boards of directors need more expertise to ensure they can respond to fast-changing politics, policy, and technology that threaten to undermine their businesses. In the U.K., government officials say boards need to think more about cyber. In the EU, they need to prepare for the Corporate Sustainability Reporting Directive (CSRD). Speaking at Compliance Week’s Third-Party Risk Management summit, Boards of the Future director Vera Cherepanova says that directors need to think broadly, rather than in specialties.

Boards are often made up of people with a variety of specialties to serve as advisors and support for the company’s management. But as risk landscapes expand, it’s increasingly untenable to find all those specialties. ”There are many types of risk,” Cherepanova said, ranging from supply chain to corruption to cybersecurity. ”It comes down to connecting the dots.”

Cherepanova’s speech comes at a time when company boards are under increasing scrutiny over how they shape strategy and hold executives accountable. Investigators of corporate corruption scandals increasingly cite corporate culture as a key factor. At TD Bank, that came from underinvestment in Bank Secrecy Act and anti-money laundering (BSA/AML) compliance, which led some employees to miss key warning signs. At defense contractor RTX, the issue was with newly acquired companies that didn’t operate with the appropriate standards to protect national security secrets.