Navigating risks in challenging jurisdictions has always been a major issue for many large companies. It seems that almost everything a company does—whether its financial transactions, third party engagement or implementing new IT systems—exposes it to some type of risks. Traditionally, risk management is something that the Audit function would be responsible for overseeing but in order to better manage diverse risks, it seems that separation is key.
“What we were seeing is that Audit was the place where all the various risks areas were falling,” said Norman M. Brothers, Jr., Senior Vice President, General Counsel and Corporate Secretary, United Parcel Service (UPS) during a plenary session at Ethisphere’s Global Ethics Summit. Technology has introduced a myriad of new risks and it is one of the many reasons why companies are looking to divide these risks into specific areas.
At International Paper, cybersecurity, fell under the purview of Audit and Finance, but over the years, this topic has received so much attention that now, it is a top priority on the boardroom agenda. For companies operating in volatile and challenging markets, identifying and addressing cybersecurity risks is one way to make a business sustainable over the long term. “Cybersecurity has gotten so much publicity that the board has asked for it to be the boardroom’s responsibility,” added Sharon Ryan, Senior Vice President, General Counsel & Corporate Secretary, International Paper Company during the session. “It’s something that an Information Technology professional from the company comes and presents directly to the board.”
While privacy and cybersecurity are a few of the many risks keeping board members up at night, in total, according to Ryan, the board is primarily concerned about what needs to be done differently and how can the company get there. “They’re very interested in knowing a lot more about the company as it is today, but really what the company is going to look like in the future,” Ryan said. “I think underlying everything is we have to go into countries where we are going to do business the right way.”
For companies like 3M, creating a sustainable competitive advantage means retaining a talented workforce. Ivan Fong, Senior Vice President, Legal Affairs and General Counsel, 3M and speaker at the session said that strong leadership is very important and it will help businesses lead through turbulent times. “As a company on the forefront of innovation for more than 112 years our leadership feels that they have the responsibility and the duty to make sure that in another 100 years we are continuing to develop leaders of the future.”