Search for

Expert panel stresses danger of ignoring risks

31 Dec 08

To survive the economic crisis, company directors will need a thorough understanding of risk, their company’s business model and the financial issues. This was the message from a senior panel of experts at an event last month exploring the pressures on corporate governance

The Corporate Governance Panel, co-hosted in Edinburgh by ICAS and PricewaterhouseCoopers, featured four leading CAs: Norman Murray, chairman of Cairn Energy; Frank Blin, senior partner, Scotland, with PricewaterhouseCoopers; Guy Jubb, head of corporate governance, Standard Life Investments; and Ian Paterson Brown, chief operating officer, Ignis Asset Management.

Murray said: “The generation of executives now in their 30s and 40s will not have experienced a serious recession, at least not in a senior role. Business risks have changed significantly in the past six months and there’s no hoping they will go away. The big risks facing the company need to be out on the table. Risk should be the number one item on the board’s agenda.”

Frank Blin added that companies now needed to “stress test” for extreme possibilities.

Guy Jubb stressed the need for communication with external investors and added that this applied to institutional investors and their clients. He said: ““We have to turn transparency into accountability.”

Ian Paterson Brown said that non-executive directors needed to be able to ask difficult questions about the financials, the company’s use of resources and its risks. But he added: “We have to manage risk, not eliminate it. Without risk there is no enterprise.”

ICAS chief executive Anton Colella told the meeting, which was attended by more than 100 senior figures in business: “CAs hold many positions of responsibility across all sectors. As members, you have a responsibility to play your part. The values exemplified by the CA – such as integrity and sound judgement – are the very things needed to restore confidence in the economy.”

 

 

Have your say





Page No: 73

Tags

ICAS

Related Articles

Practice Web Tower (link opens in new window)Advertisement