Risk Management and the Board of Directors - Introduction
Harvard Law School Forum on Corporate Governance, September 17, 2022
2 Pages Posted: 9 Mar 2023
Date Written: September 17, 2022
As companies seek to navigate a multi-stakeholder global landscape and the world continues to adjust to the impacts of Covid-19, significant new risks have emerged that are reshaping the near-term business and risk landscape. These new risks—and the intensification of longstanding risks—are pressure-testing the agility and resilience of corporate strategies, risk management systems and practices. The pandemic accelerated technological disruptions and business model changes and exposed sharp differences in the impacts felt by different sectors, with some experiencing enormous dislocation and others doing remarkably well and arguably emerging stronger. Looking ahead, all sectors of the economy are facing macroeconomic headwinds, including persistent inflation, surging interest rates, continued supply-chain bottlenecks and commodity shortages, all occurring amid the backdrop of the war in Ukraine, China’s zero-Covid policy and growing geopolitical tensions. Severe drought, heatwaves and flooding across the globe have highlighted the burgeoning challenge of climate risks, which, along with the tight labor market and declining fertility rates across the developed world, present near- and longer-term risks that will require significant planning. Cybersecurity also continues to be a significant threat with regulators stepping up focus in step with growing geopolitical risks. In the United States, the 2022 midterms and ongoing political polarization continue to create uncertainties and surprises that companies will need to prepare for and address.
Keywords: Risk management, corporate governance, stakeholder, pandemic, covid business model, economy, macroeconomic, geopolitical risks, cybersecurity, Ukraine, political polarization
JEL Classification: K00, K10, K20, K22, G34, G14, G32, G38
Suggested Citation: Suggested Citation