Board Intelligence and Simmons & Simmons have launched their Governance Information Risk Policy to address the risk of boards making the wrong decisions because they don’t have the right information.
You can request a PDF copy of either the Corporate Policy or the Financial Services Policy by emailing Natasha Szczepanik.
Governance information risk is the risk of boards taking the wrong decision about material issues because they don’t have the information they need. Or, it is because they have so much information that the real issue is masked. This risk is prevalent in all organisations and high profile scandals have shown that poor decisions have material implications, with impacts extending to the revenue, share price and the reputation of the organisation. So, what can be done to mitigate this risk? Board Intelligence and Simmons & Simmons developed the Governance Information Risk Policy to provide guidance on how to avoid information risk and address the following questions:
- How can you best fulfil legal and regulatory obligations?
- What does best practice information contain?
- How should you respond to identified risks?
The Policy provides the guidance that firms have been looking for on how to fulfil their legal and regulatory duties and mitigate information risk. In producing this Policy, we identified our top 10 tips for those looking to improve the quality of their information and reduce governance information risk:
1. Summarise
Provide a summary covering the context, questions the paper addresses and conclusions and put this at the front of the paper.
2. Anticipate
Anticipate the readers’ questions/alternative options.
3. Keep it short
Don’t drown the reader in too much detail or information.
4. Provide insight
Focus on results, root causes, implications, materiality, remedial/preventative actions and outline the implications for the business.
5. Have purpose
State the purpose of the paper, the action required and its timing, and whether the paper is for:
- information
- decision
- discussion
- ratification
- approval
6. Don’t assume
Identify critical assumptions and indicate their materiality and likelihood. Distinguish between statements of:
- plan
- hope
- expectation
- fact
- belief
- commercial judgement
7. Restrict
Where information is legally privileged, steps must be taken to maximise this, maintain its confidentiality and circulate it only on a ‘need to know’ basis.
8. No jargon
Avoid jargon/abbreviations and Latin. Write clearly and succinctly, and use headings and sub-headings to guide the reader through the paper.
9. Be alert
Alert the reader if underlying information is not:
- capable of substantiation
- up to date
- from reliable sources
- comparable
10. Focus on the deviations
Performance reports should focus on material deviations from plan, the cause of the deviation and explain what management is doing in response.
Access the policy and further information
If you would like to recieve a copy of the Governance Information Risk Corporate Policy or the Financial Services Policy please email Natasha Szczepanik.
To find out more about the governance information risk and how to tailor this to your organisation contact Natasha Szczepanik or Niamh Corbett of our Advisory Team.
