In case you don’t know or can’t tell, I love speaking with and learning from others to understand their challenges as it can reveal what others are likely facing. And a recent conversation with a newly appointed head of audit revealed a challenge that I felt important to pass along.
You’ve heard me say over and over how the key to successfully integrating ERM into strategic decision-making is not based on processes or adherence to standards like ISO 31000 or COSO as many would assert, but rather relationships and soft skills.
One way this is especially relevant is regarding any board committee or executive level presentations or risk-related discussions.
As I discuss in this primer on risk reporting, NC State’s annual state of risk survey consistently indicates that a significant number of company leaders (over 40%) are “not at all” or “minimally” satisfied with the quality of reports they receive from risk personnel.
Look, we all understand what it feels like to be caught off guard.
Now try to imagine this feeling from the perspective of an executive, business-unit manager, or board member in the middle of a presentation or ERM discussion.
Going into a committee or another meeting without preparing participants and impacted parties in advance can feed into a negative reputation of ERM.
With no preparation in this type of situation, meeting participants will start asking “what is this?”, “where did you get this information?”, and “I’ve never heard of this” – essentially lambasting you in front of the group. It is especially embarrassing to be raked over the coals in front of the whole executive group or your team members.
Besides making you feel embarrassed and awful, this type of situation feeds the reputation of ERM being a “check-the-box” activity. If the material is especially negative, then a situation like this will lead people to believe ERM is there to simply say “gotcha.” I’m sure you can understand that the COO will not appreciate being caught unaware in front of the CEO.
At the end of this, you can feel exhausted and frustrated. And this doesn’t even factor in time – the time during and after the meeting to answer tons of questions, the follow-up, the revisions, the endless back and forth, and so on. In the case of the audit leader from earlier, he was lamenting that all the back and forth of questions, revisions, and the like after the meeting would take a long time.
Taking the time to share or socialize materials with people one-on-one before a group discussion eliminates many, if not all, of these headaches.
When speaking with the new auditor mentioned at the beginning, I recommended he meet with key players one-on-one to iron out kinks before his presentation. While this does take some time, it’s not nearly as much as it would be otherwise.
Whether it’s risk information, audit information, or some type of mitigation plan that has an impact on multiple business areas, it is strongly advised to talk through what you’ll be presenting beforehand with relevant stakeholders. Doing so can help…
- Address questions and/or concerns privately (for both you and the other person).
- Ensure the executive, manager, or Board member is comfortable with what you’ll present.
- Identify anything you should add, modify, or remove.
- Protect both you and the executive, because if you present negative material without speaking with them first, they will feel like they are being attacked.
One-on-one conversations with key players before a formal meeting is simply smart reputation management for all involved. In his book World-Class Risk Management, author Norman Marks tells the story of meeting with a company VP. Upon thanking him for his time, the executive didn’t say “you’re welcome,” but rather:
No, Norman. I should thank you! Our conversations are the only time I have to sit back and think about the business as a whole. I spend my whole day fighting fires and talking to people about specific issues. I value our discussions as an opportunity to consider the bigger picture.”
And as I discuss in a previous article on different personas required for building an effective ERM process, speaking with others in a transparent way like this also indicates a willingness to listen to executives and other company leaders and understand how you can help them better do their job.
As part of your preparations for that group discussion or presentation, be sure to include everyone on the committee or board. Even if someone’s input isn’t critical on a particular presentation or discussion item, try and speak with everyone as you don’t want to make people feel as if they are being slighted.
In the case of our audit leader, conducting these pre-meeting discussions ended up saving him and his team a huge amount of time. Instead of having to make revisions and go back for the committee’s approval or try to track down each leader’s individual approval via email, he was able to get the green light during the meeting and was not held up from moving forward.
Have executives or managers in your company ever been caught off guard with risk information? If so, how did they react?
Since issues like this do not receive much attention, many ERM professionals learn this type of lesson the hard way. If you have experience or other insights you would like to share to help others avoid this mistake, I invite you to leave a comment below or join the conversation on LinkedIn.
You can also submit your comment privately by emailing firstname.lastname@example.org.
And lastly, if you are struggling to present materials in an effective way to executives and other decision-makers, please do not hesitate to reach out to me via email, phone, or through my online calendar to discuss your specific challenges and a way forward.