What They Don’t Know Will Probably Hurt Them

It is always interesting to read the various studies that report that directors don’t have an in-depth understanding of their organization’s business, its strategies, and the related risks. In fact, the executives who don't knowstudies generally report that the level of understanding is insufficient for them to provide effective oversight of management and governance of the organization.

I want to turn this on its head.

If you are the head of risk management, internal audit, information security, or a senior executive, answer this question:

Do you believe that your directors have a sufficient understanding of the reality that is the organization: its culture and politics; the effectiveness of its people, systems and processes; its strategies; and whether risks to the achievement of its objectives and delivery of value to its stakeholders are being managed within acceptable tolerances?

If not, do you have an obligation to help educate the directors? What are you doing about it and is that sufficient?

Now let’s ask another question?

Do you believe that your top executives (including the CEO and CFO) have a sufficient understanding of the reality that is the organization: its culture and politics; the effectiveness of its people, systems and processes; and whether risks to the achievement of its objectives and delivery of value to its stakeholders are being managed within acceptable tolerances?

If not, do you have an obligation to help educate them? What are you doing about it and is that sufficient?

If the directors and/or top executives don’t understand reality the way you do, if their head is in the sand or in a more pungent place, shouldn’t your priority be to help them get their head on straight, pointed in the right direction? If they don’t understand the current state of the organization, shouldn’t the process of informing and educating them be fixed before trying to communicate new areas of concern?

I welcome your views and commentary.

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