For an organization to thrive in pursuit of its goals, risk-taking is essential. For an organization to take those risks effectively, its board must function optimally to determine and communicate its risk-taking objectives and risk tolerance.
The full benefits of positive risk- taking in this aligned and trusting environment include deeper collaboration, increased creativity, and accelerated innovation – in other words, an environment that leads to value creation.
But what if stated risk tolerances are not the ones really held by directors? What if actual preferences are hidden deep in our subconscious and only clearly revealed under duress or deeper analysis?
A lack of clarity regarding individual risk preferences among board members can create surprising conflict in the boardroom, challenge consensus, and potentially slow an organization’s progress toward new opportunities that maintain a competitive advantage – in other words, an environment that leads to under-performance or, even worse, value destruction.
Board risk preference reports identify whether the environment exists as it appears or even as desired.
Understanding risk at the board level requires knowing each director’s true risk preferences, how the organization deploys those directors across crucial board committees, and any gaps, conflicts, or misalignments with the purpose of each board committee.
We also need to know if, collectively, the board’s risk preference aligns with the stated corporate attitude on risk, which some call a risk appetite. This is critical to building the ever-important environment of trust.
For a board of directors, differences in attitudes toward risk can change decision- making, culture, and interpersonal relationships. Risk personality traits have the power to affect an entire group dynamic. They may be revealed through conflict or lack of progress but identified as originating from other sources.
Through this report, you’ll understand how your board’s risk profile compares with your stated risk preferences and goals, and whether your crucial board committees have risk profiles in alignment with the expectations of those committees. The base report covers up to ten board members and three board committees. Additional members and committees can be added for a small fee.
In this report, the DCRO Institute provides a detailed analysis of your risk preferences. You can integrate your risk profile into your board search and documents to make you an even more effective and attractive board candidate. You can use this data to position yourself for specific committee assignments or as a complement to existing board risk preferences.