Britten Coyne Partners

Strategic Risk Governance and Management Experts

Emerging Risks: UK Corporate Governance Code Compliance and Board Performance Improvement

The UK Corporate Governance Code now requires that company boards “should [annually] carry out a robust assessment of the company’s emerging risks...including procedures in place to identify and manage them." This echoes previous guidance by the Financial Reporting Council, that "boards need to focus especially on those risks capable of undermining the strategy or long-term viability of the company, or damaging its reputation.”

These disruptive and potentially fatal risks now emerge much more frequently in a world of greatly increased connectivity, complexity, and uncertainty.

Our Approach

Through our consulting, education, and forecasting offerings, since 2012 we have helped clients to better anticipate, more accurately assess, and adapt in time to the most dangerous risks they face.

To help clients meet the Corporate Governance Code’s emerging risk standard, we first document and evaluate the “As-Is” situation, including key processes, and stakeholder satisfaction with them.

To the extent that there are gaps between the As-Is situation and our evidence-based best practice model, and/or if stakeholder satisfaction is an issue, we recommend improvements and work with the client team to design an integrated “To-Be” approach to anticipating, assessing, and adapting to emerging risks.

We also provide “How-To” guidance for moving from the “As-Is” to the “To-Be” state, and where needed provide the required tools, training, and coaching.

Client Benefits

Beyond meeting the compliance requirements of the Corporate Governance Code, improved management and governance of emerging risks has substantial economic benefits for clients.

In “The Mortality of Companies”, Daepp et al identify a roughly constant hazard rate of about 5.80%/year for the failure of public companies between 1950 and 2009. If a company can reduce this hazard rate, the benefits to its shareholders, employees, and the communities in which it operates are very substantial.

Moreover, as Ormerod and Roswell showed in “How Much Can Firms Know?”, even a slight improvement in an organisation’s ability to acquire knowledge about the sources of competitive success and failure can dramatically improve its survival rate.

Our Qualifications

Neil Britten and Tom Coyne have over 80 years of experience, as consultants, bankers, executives, and directors of companies around the world. Since 2012, Britten Coyne has focused on strategic risk governance and management (SRGM), through our corporate advisory, educational, and emerging risk forecast offerings.

Our methods and tools are based on an extensive evidence-base, including intelligence analysis, complex systems theory, individual, group, and organizational psychology, and Tom’s four years of experience as a member of the Good Judgement Project team which won the United States Intelligence Advanced Research Projects Activity's forecasting tournament, as described in Professor Philip Tetlock’s book, “Superforecasting”.

For More Information

Download a pdf summary of our Corporate Governance Code/Emerging Risk Compliance and Performance Improvement offering.

To learn more about how we can help your company meet the Corporate Governance Code’s emerging risk requirements, please contact us:

"According to [directors surveyed in 2013], most boards need to devote more attention to risk than they currently do." — “Improving Board Governance" by McKinsey & Company

“Risk was given insufficient time, attention, focus, and priority by the Board … The risks involved were either not identified or, where identified, not fully understood”
— FCA Report on “The Failure of HBOS Plc”, November 2015

"When failures of this magnitude occur, boards must always accept accountability, if only for things they did not do."

-- "Failings in Management and Governance", The Kelly Report on the Coop Bank

“The five year mortality rate for public corporations has increased from 5% to 30% in recent decades.”

— BCG Henderson Institut

"While boards pay attention to many aspects of risk, an important priority is to help management understand and manage the most strategically important risks...It is not as easy to assess big strategic risks as it is to assess narrower, more easily measured risks...Boards must assist in this process by discussing strategic risks frequently and seeking the input of outsiders..."

— Audit Committee Leadership Network Viewpoints", Issue 42, July 2013, by Ernst & Young

“Perhaps the single biggest challenge directors face is understanding the multiple forms of risk their companies are encountering today…This begs the question: Are boards today equipped to tackle all that is thrown at them, especially in these emerging, and largely unknown, risk areas?”
— “What Directors Think, 2015” NACD Governance Services

"Until recently, most non-executive directors would have told you that the audit committee is the one they really wish to avoid...[But] the risk committee is now the one to dodge...[It] has a broad range of responsibilities...Whereas the audit committee looks backwards, risk committees must look forwards -- a more difficult task...[Even as] the regulatory focus on risk committees has grown...there remains uncertainty about what they should actually do...[and] they still tend to rely almost exclusively on information generated within the business...There is much work to do before risk committees feel comfortable with the new burdens being placed on them."
-- Audit Is No Longer The Chore the Board Dreads Most, FT 28Jul14