Not long ago, defining corporate board responsibilities was fairly routine: Make sure you have the right CEO in place, and provide strategic oversight to ensure that the company is moving in the right direction. Fast-forward to today, and an expanding risk landscape is evolving the role of the corporate board.
Historically the role of the director was focused on two areas: the vetting of strategy and succession management. It’s evolved considerably over time, and appropriately so, as the demands of the dynamic environment in which we operate continue to be placed on the enterprise. Now it becomes much more a question of, ‘What are the risks that are affecting an enterprise—and who should be responsible for overseeing those areas of risk?’
— Les Brun, Lead Director, Merck & Co. and Broadridge Financial Solutions
In this episode, Les Brun, the lead director for both Merck & Co. and Broadridge Financial Solutions, sits down with guest host Doug Chia, Executive Director of the Conference Board ESG Center, to discuss how emerging risks are impacting the board’s responsibilities. Brun emphasizes the board’s role in managing the organizational risk register, an important function that focuses on risk prioritization and impact.
“Cyber [risk] for example is now a critically important piece for…most enterprises,” said Brun. “That is high on the risk register and should be for just about everyone. [But] five or ten years ago, the word ‘cyber’ didn’t really exist in the minds of most directors.”
Talent development and succession planning within the organization is another oversight area highlighted by Brun. It’s important for board members to interact with managers (i.e., one or two layers below the CEO) to get a sense of their professional acumen and role within the succession plan.
“The notion of board buddies is a really good concept that we’ve employed in a number of different places,” said Brun, explaining that board members are assigned (on a rotating basis) to rising talent within the company.
“It’s mentorship for both parties…,” he said. “It gives the board member far better insight into the operational dynamics and the cultural dynamics of the enterprise. And hopefully, it gives the manager the opportunity to better understand what’s important to the board…”
In this episode, Brun also shares his views on the combined chair-CEO role and whether the conventional notion of ‘noses in, fingers out’ still applies today.