Risk in the Boardroom

Transcript

Risk in the Boardroom

Sarah 15:40:
Upskilling boards from outside perspectives, I think is essentialbecause no one person, no one board can really be fully up to date and experts across the plethora of risks operating in these areas.

Sean 13:29:
if you look at the data analytics that you can now do, it can strengthen your ability to manage risk by identifying your vulnerabilities early and then guiding your contingency planning ahead.

Pam Joshi 30:52
it doesn't necessarily have to be people that are risk professionals necessarily, but you know, there's various other individuals and functions within an organisation that can advise on how to mitigate, minimise and respond to risk. So there isn't a one rule fits all

Tom Parker (00:01.07)
Hello, I'm Tom Parker and welcome to the Next Five podcast, brought to you by the FT partner studio. In this series, we ask industry experts about how their world will change in the next five years and the impact it will have on our day to day. In this episode, we're looking at risk in the boardroom. The term polycrisis has been gaining traction in recent months as the world faces one disaster after another that are all interlinked.

The far reaching implications of a world at risk means boardrooms must remain agile to navigate their businesses past the rocks and into calmer seas. In a break away from our normal format, we've created our own boardroom. Sat around our virtual table today, our three experts ready to discuss what risks are out there, how boards are dealing with them, and what the boardroom dynamic needs to be to navigate a fast evolving and uncertain future.

So let's meet our guests. I'm pleased to be joined by Sean McGovern, UK CEO at AxaXL.

Sean (01:09.556)
Hi, Tom. Really good to be here.

Tom Parker (01:12.728)
Pam Joshi, Global Head of Insurance and Risk Management at Takeda Pharmaceuticals.

Pam Joshi (01:17.676)
Hi Tom, thanks for having me.

Tom Parker (01:20.012)
And finally, Sarah eyested, UK Risk Leader at PWC UK.

Sarah Isted (01:25.03)
Really good to be here. Thanks for inviting me.

Tom Parker (01:27.756)
or it's a pleasure to have you all here. Sean, let's start with you. Could you give us a brief introduction to the types of risks that boards are facing at the moment?

Sean (01:38.23)
Sure, and as you mentioned, Tom, right at the outset, that it's clear that we are experiencing a poly crisis and that uncertainty is going across borders and every aspect of life at the moment. And of course, what that means for our clients is that they're operating in an increasingly complicated world where

the risk environment is changing fast and is becoming more and more complex. Having a touch point to understand those risks and the challenges that our clients are facing is really critical to us. And a key part of what we do is we ask our clients how they are feeling about the macro risk environment and what matters to them the most. We've been doing as AXA a future risk survey now every year for over a decade. And it's a survey that goes across

At the Globe, we have 20,000 people representing both public and industry experts. And what's interesting is for the third consecutive year, the top three risks are climate change, geopolitical instability, and cyber security. The next one that's just crept in is AI and big data. So if I just take one of those, so if we look at geopolitics, for example,

from a boardroom point of view, know, look, geopolitical tension has got a huge impact on client operations and ultimately their confidence to do business globally. and Pam will be able to, I'm sure talk more in depth about what that actually means for a multinational company operating in the kind of environment that we have today. But clearly it cuts across investment decisions, supply chain decisions.

and ultimately the costs of doing business and the costs of ultimately ensuring business operations. Now, insurance has got a whole range of solutions that are available to help clients mitigate those geopolitical tensions. And obviously, you know, one of the things we're looking at always doing is how can we as insurers help clients strengthen their resilience and their agility?

Sean (04:00.478)
And traditionally, look, insurance has always just been viewed as a means of picking up the pieces, paying claims, dealing with an adverse event after the event has already happened. And I think that underestimates what insurance can do because it's our firm conviction that insurers can enable clients to navigate that uncertainty, lean in and with the right insights and tools, take opportunities in the face of that.

change and that uncertainty. from what we believe, we think we can add value to clients as they're navigating through geopolitical risk, which I've just highlighted.

Tom Parker (04:41.496)
Sarah, Sean mentioned obviously a few there. He touched a little bit on the geopolitical side of it. And it must be obviously an incredibly difficult environment for organizations around the world to tackle these tip for tap tariff wars that have both short and long-term impact. Does that need particular attention at the moment? Or there are others from that list that you think require the extra attention as well?

Sarah Isted (05:11.912)
Yeah, thank you Tom and the geopolitical area is obviously a key one but there's two others that I would highlight as well which is reputational risk and technology risk but perhaps if I just come in on geopolitical just to sort of echo what Sean has said but I think this is a really key area.

that the world that we're used to operating within, which had sort of global integration and cooperation, isn't here. And it doesn't look like it's coming back anytime soon. We used to talk about uncertainty, but we now also talk about unpredictability as well. And companies can't afford to just look on from the sidelines anymore. They need to be understanding the risks they're facing. You talked about supply chain, that would be a key one. They need to model the impact and then take action. So they really do need to be

and resilience, so echoing Sean's points. But the other two I would highlight would be firstly reputational. So societal norms and expectations are changing rapidly and stakeholder groups are evolving. You know, we're seeing employees get much more vocal, we're seeing activist investors, we've got the fast nature of social media and all that.

means that reputational risk needs to be considered very differently than perhaps they've been considered in the past. So we're seeing boards focus heavily on that. And then technology, there's lots of uncertainty, excitement, energy around technology, but there's not a full understanding of the risks.

Pam Joshi (06:30.888)
that we've got.

And that's

Sarah Isted (06:43.79)
both short and longer term and so boards really need to be willing to ask questions, seek those answers, experiment and work with ambiguity and certainly that experimentation piece is perhaps not something that all boards have been comfortable with in the past and so you really do need a strong purpose and strong set of values to drive those decisions so those are the ones that I would highlight.

Tom Parker (07:09.078)
Pam, any of those risks resonating with you and are there any sector nuances for you in the healthcare industry?

Pam Joshi (08:45.07)
So I agree with Sean that traditionally insurance may have been viewed as a mechanism to recover costs, but I think companies are being a lot more proactive in managing risk, in understanding that risk and exposure. I mean, if you take us for an example, we have been modeling supply chain risk for the last five or six years. And actually we're in a position where the data that we use for that deterministic model

and in identifying what maximum foreseeable loss situation could actually look like is our own data. And with that, we're able to then package and articulate very, very clearly what we feel our exposure is. And that really does help with identifying the right insurance solutions, in structuring our programs in the most efficient way, and also looking ahead in the mid, short, and long term.

to how best we can place insurance, but also manage our risk internally and advise our execs in the right way.

Tom Parker (09:51.982)
Great, thanks, Pam. Well, I mean, look, there are clearly lots of near-term and long-term risks for all businesses which will require varying strategies to deal with them. Sarah, how are boardrooms correctly positioning themselves to manage business risk?

Sarah Isted (10:08.556)
Yeah, great question. We've touched on already in our answers around resilience and agility, which I think are fundamental here. So I'll leave those given we've touched upon those already. There's three other things I think boards are doing and should be doing to be as well prepared as possible. One is their use of technology and data to really allow them to have greater horizon scanning and real time monitoring of risk. And that should help as well make sure that the information

that the horizon scanning functions organisations have actually gets to the decision makers, which sometimes there's been a bit of a gap there. So use of technology and data. Secondly, scenario planning to be better prepared for different outcomes given the increased volatility that we've all talked about.

In the past I think scenarios have been focused on those that might have higher probability but now I think boards really need to be focused on plausibility as well as probability and that means being prepared for some of the lower probability outcomes because as we're seeing those are happening as well. And then the final area is to think for boards to think about how do their stakeholders perceive them.

what trust do stakeholders place in the organisation, how trustworthy are they deemed to be? And that really helps boards determine where they should prioritise risk resources. So what parts of their systems are essential for their brand and trust? And how susceptible or safe is their digital environment to things like cyber security and privacy risks that have been mentioned already? And I think taking that slightly different approach rather than just looking at a long list

of risks which can end up being a very long inventory is a great way of making sure that boards can really focus on the right risks, think about their resilience and think about how they might respond.

Tom Parker (12:08.718)
Sean, would you agree?

Sean (12:11.094)
I would agree.And I think picking up on something Sarah was saying about the importance of

Data and analytics and technology, think what that can do and Pam touched on it as well, it can make us all better informed about how to navigate through the risk environment. So if you look at the data analytics that you can now do, it can strengthen your ability to manage risk by identifying your vulnerabilities early and then guiding your contingency planning ahead.

of an issue or a problem arising. And the more insights you can glean from data, it allows insurers then to really provide bespoke solutions, some of which will be traditional insurance solutions, but some of them will be advice and insights around risk management and the mitigation of those risks, because we all have a shared interest in actually seeing those risks avoided or mitigated rather than

fully manifested. And then, you know, when you look at the what technology can bring into the conversation that an insurer and a client can have, you know, you can harness the power of data, you can do real time monitoring, monitoring and predictive analytics to really empower the client organization to to manage their exposures in the best possible way.

Sean (14:29.002)
and manage those risks that we've been talking around, supply change, workforce, cyber, et cetera. This is all about trying to leverage data to be much more risk aware, to take decisions in advance and manage it. And then even when risk does happen and events do happen, then even then data after events can be a hugely powerful tool. So if you look at what you can now do with Geospatial,

data to go in very quickly to assess damage to understand what has been the cause of loss and understand the impact of that loss, know, it enables insurers to pay claims faster, which will enable businesses to get back on their feet much more quickly, which has to be the objective when you've faced into a challenging situation.

Tom Parker (15:21.461)
Absolutely. Pam, any thoughts?

Pam Joshi (15:24.058)
Yeah, I think if we talk specifically about climate or extreme weather, we know the regulatory landscape is a little bit disjointed, it's evolving, but do we need to prepare for it? Absolutely. And I think what businesses are doing more and more is, think to Sean's point, are evaluating their cyber exposure or the climate impact exposure between now and let's say all the way up to 2050.

And whether you do it in chunks of up to 2030 or 2050, the key thing is, is that it's going to impact us. Let's be prepared now. And I think in terms of utilizing data, there's so many clever things that can be done. you know, using company's own location data, supply chain data, potential revenue impact data as a baseline.

And then coupling that with real time, also external insurer data can really be quite compelling when you're then presenting it back to your execs, to your board in developing an adaptation framework, or in some cases, you know, some sort of visualization around risk and data. And it really does start to create a bit of a global risk map or web, as some may call it, but actually you've got to start somewhere.

Tom Parker (16:51.63)
Yeah, I want to dig a little bit into the cyber threats and AI. You know, these are fast evolving risks in the near term. So how can boards react at the speed and quality required? Sarah, let's start with you.

Sarah Isted (17:05.266)
Yeah, definitely. And firstly, and you've alluded to it, it's so important that cyber and AI as examples need to be key risks on the board agenda and not just something cascaded to the technology teams. And I think that's evolving quickly now. And we've seen in recent months just the material impact these issues can have on organisations. And some of the things that Sean and Pam have talked about in terms of scenario planning, understanding critical areas are very relevant here as well. There's two other things I

would highlight. Firstly skills and in relation to skills keeping an open mindset.

Upskilling boards from outside perspectives, I think is essential here, because no one person, no one board can really be fully up to date and experts across the plethora of risks operating in these areas. And it's evolving so quickly as well as we've talked about. So those boards and those individuals are open to hearing perspectives, whether it's from other industries, other geographies, whether they have advisors come in, horizon scanning sessions, however they do it.

and that means that they're often more agile, they can respond to crises when they do occur and they're not just thinking I need to follow the playbook that we've agreed six months ago because things are just evolving so quickly. So I think being open to upskilling in different ways I think is really important. The second thing I would talk about is risk appetite and that's been you know mentioned already as well but developing risk appetite and clarity on that really

boards to think about what risks are they prepared to take, what are they not prepared to take, and to be able to think about that outside of the stressed situation, outside of the crisis, can really then empower leaders to act quickly and capitalise on opportunities. We often talk about risk management as being something to stop us doing things, but actually it can really empower us to do things. And I think in these sorts of areas and in fast moving areas, that's

Sarah Isted (19:14.118)
hugely important and so it's really important to the growth agenda of organisations and so that really thinking that through, thinking about your risk appetite allows you to take and capitalise on some of these opportunities that are moving really quickly.

Pam Joshi (19:34.507)
Interesting. I do want to touch back on the scenario testing because it's a theme and it's an exercise that does feature quite frequently within my peer group, within businesses, within organisations. So I think there's ways to do it. So some of this is a direct dialogue with your execs, with the board and really getting them on the journey.

And some of this is actually then taking a further deep dive into topics and issues, discuss key concerns of businesses, and then utilizing actuarial models, utilizing that external skill set to really help drive that discussion further. I think if we link it back to insurance, that's really helped us in being more decisive around cybersecurity controls, on how to tackle the evolving nature of AI.

and tech and also the regulatory landscape that's also trying to keep up with it. But I think if I talk specifically around how companies are sort of managing this, also if you think about investment in tech and AI, I think it's really important to be deliberate and purposeful in how you're looking to deal with that.

Pam Joshi (01:30.402)
So interestingly, we very recently established a new governance body, which is called the Digital Portfolio Committee. And it's chaired by our Chief Data and Digital Officer and actually comprises of the entire exec team. And actually what it does is help us prioritise and measure our AI efforts and investments. So really positive.

So, you know, there's so much that can be done, but we have to keep up with the pace of how quickly AI is evolving.

Tom Parker (21:29.036)
Yeah, Sean, on that pace. Any thoughts?

Sean (21:34.292)
Yeah, so look, think based on everything that we've been talking about, and what Sarah and Pam have just covered, and of course, the acts of future risk report did highlight cyber risk and the growth of AI as a key risk topic for companies. Clearly, you know, as Pam has just touched on, it's evolving very, very fast. And we've talked about the power of it and how we can harness

data AI to help us manage risk, but in the same way, it creates risk for clients themselves. So it's important that clients are well-educated, as Sarah touched on. It's important that clients are controlling their deployment well, which is something that Pam just talked about. And for us as an insurer in thinking about how can we add value to clients,

Clearly large businesses like the business that Pam works for, they have the ability to access expertise both from insurers, but also from in-house and other external providers. The SMEs, the smaller companies, perhaps find it a bit harder to access that expertise and access, indeed, cyber insurance solution. And that's where we've seen historically insurance penetration on cybersecurity, for example, cyber insurance.

has been much patchier. It tends to be something that's taken out by the large companies, the smaller companies have, I think, found it harder to engage with the insurance industry there. So one of the priorities for us as a business is how do we help clients in that segment gain the kind of understandings that they need to understand how this risk is going to evolve, how it's going to impact their business, and how they should manage that risk to their business.

You know, if you go back in time, historically insurers were there to manage physical assets and help ensure physical assets. You know, we're in a world today where much of the value that drives a company valuations is not about physical assets. It's all about data and it's all about IP. Historically insurers have been much less good at providing solutions to those kinds of challenges. And I think that's a continuing

Sean (23:51.21)
conversation that we need to have with our clients about how it is that we can add value to them when they're trying to manage what is still a relatively new risk type and one that is evolving very, very quickly.

Tom Parker (24:05.294)
Sarah, you had your hand up there earlier after Pam's answer, so I'll let you have the floor again.

Sarah Isted (24:11.506)
Yeah, thank you. And I just wanted to add to Pam's comments about scenario planning, because we've all touched upon that.

today and I think one of the things we've seen in the past is that scenario exercises were done but they were perhaps done you know not that regularly you know maybe it was a big annual exercise and they were quite big exercises and those types of scenario planning exercises I think are important but I think in the pace at which we're all now operating actually having more frequent scenarios and perhaps smaller scale not

involving everybody, different groups of people, so you can really delve into some of the areas. I think it helps to build muscle memory of how do we respond in a crisis, how do we deal with this sort of thing. And so I think there's something for boards to think about, just how are we doing our scenario planning and is there a way to evolve that to reflect the environment that we're now in as well.

Tom Parker (25:09.998)
I wonder whether the frequency and detail of the scenario planning that you mentioned there, Sarah, is helped with technology and AI. mean, if you're forecasting a lot, you've got a lot more access to better cleaner data in your organization. You can create these scenario plannings much, much easier, much more regularly with much more visible insight. And I actually want to dig into that a little bit more. I know it's been touched on in parts, but Pam, could you perhaps look at how organizations

are approaching AI and other technologies. Obviously, cyber and AI has the risk associated to it, but there are benefits. So perhaps how it's supporting their decision-making.

Pam Joshi (25:50.474)
if we're talking specifically about modeling or, you know, simulating cyber and AI scenarios, I think looking at it more from a total cost of risk perspective as your starting point can enable you to kind of work through the value chain of, you know, a business. So it isn't just specific to the insurance purchase, or it isn't just specific to

an investment in AI or digital and tech, but actually how a company could be more resilient and respond appropriately. And I think just on the other point in terms of how you approach or how you incorporate an AI driven culture, I think starts with education. So I think it's really ensuring that the entire workforce or at least a large proportion of it is educated.

is up to speed on how to power data and AI and, you know, I guess link it to its organization's key objectives. So from our perspective and for most life sciences companies, the key and core of our business is to ensure that patients receive the outcomes that they should be. I think also,

how you integrate AI, I think I talked about value chain, how you integrate AI and data, digital and tech in your key business processes is really key. So if your priority is quality control and supply continuity, then that manufacturing process and that R &D piece is really important. Life sciences in particular, the R &D pipeline is key.

it's always going to be a priority. But if you then establish in parallel, a data digital and tech or an AI pipeline, I think that's where, you the way you operate can almost be linked to what your exposures are.

Tom Parker (27:59.8)
I want to look a little bit more about around risk responsibilities and how they're shared across members of the board. Should they be shared equally or perhaps how a risk committee is chosen, appointed and devised? Sean, can I start with you and then Sarah?

Sean (28:22.78)
So I think there is no one size fits all model here. I think and I'm sure Sarah and Pam will give interesting perspectives about what they see. I guess what I would see is, you know, look, in the financial services industry, you probably have the most evolved risk governance process than you see in most sectors of the corporate world.

And that has largely been driven by regulation. So regulation has demanded that there is a focus on risk that, you know, we've seen the role of the chief risk officer really grow over the last decade, particularly post financial crisis, looking to try to bring accountabilities for risk through to a chief risk officer and then ultimately onto a board level risk committee. But that isn't necessarily appropriate for all businesses.

I think going back to something Sarah said about the, you know, risk boards need to be well informed about risk, you know, regardless of how a company is organized, both from an executive point of view, but also from a board point of view, it needs to understand that there is the right level of risk coverage and that there are no gaps. And that's the critical that is the critical factor, because if responsibility is dispersed, it's very

easy for that to be a gap that is not picked up and that could be a weakness in how a company looks at its risks. From my experience in the insurance industry and I have been a Chief Risk Officer, there is nothing like the accountability of having a single person who is responsible for the second line, what we call the second line function, which is there to underpin

what the company is trying to do with a holistic view of the risks that are arising from the company's operations. And that gives the board, I think, a huge amount of comfort that there is somebody who is acting as that second pair of eyes across all dimensions of the company. So certainly my experience, I guess, in the financial services industry is that model has worked very well. And what will be interesting to see now that we're in this

Sean (30:41.97)
ever growing, more complex environment where risk is absolutely right at the top of all board agendas is how the board manages both its responsibilities, but then how it wants the executives to show up to boards with a view of the risk profile of the company and what the mitigation measures are that are being taken to give the board comfort that they are stewarding the company through this very, very complex environment.

Sarah: I would agree with Sean's first comment, well all of it, but the comments about there's no one size fits all and I think that's the same with risk committees as well actually. So I think firstly I would say making sure you've got the right skills and individuals on a risk committee is vital and you need a diverse group of skills.

You need individuals that are prepared to ask questions and challenge even in areas that are their area of expertise, because often somebody might say, I've got a really basic question. But actually, it's the basic questions that often get to the fundamental issues. And that's far better than having a group of experts that are prepared to challenge and believe that they know the answers. It also shouldn't just be a group of risk professionals or risk experts. We need first line expertise. need different expertise.

across an organisation and some external perspectives. So I think firstly, making sure you've got the right group of skills and individuals is really important. But then I think you need to think about the terms of reference for a risk committee, which links to some of Sean's points and what we see in different industries. So some organisations will have a board level risk committee, some will have an executive level risk committee, and there might be differences in what they

do. So a board level risk committee, for example, might be there to make sure that the risk management processes are appropriate. Whereas an executive level risk committee might be there to get into the detail of the individual risks and how they're being managed. And I think that what's really needed is clarity of what the risk committee is there to do. But then to another point that Sean made, it can't be the case that the board just say, well, we've got a risk committee, they're responsible.

for risk or we've got an individual they're responsible for risk. It needs to be a collective responsibility even if you have individual accountability and where things are fast moving things have got to be escalated back up to the board. So I think risk committees can be incredibly valuable at both the board and the executive level but they need to escalate up appropriately to the board to make sure the board are engaged at the right times.

Tom: So Pam, do have any real world examples of how this might work with everything that Sean and Sarah have discussed?

Pam Joshi (34:50.286)
Absolutely. I think I definitely agree with Sean and Sarah that it is common and it's becoming increasingly more important for one head of risk or a CRO to sit, you know, facing the execs or the board. But what is also common, I think particularly in the environment that I'm in at the moment, is having a group of risk leaders, officially or unofficially, interacting with one another, discussing real time topics.

and issues and evolving risks and then ensuring that those key messages are actually then translated back to their own respective execs or the board. And also how that works well is if you take a crisis simulation exercise, think about who you might want to bring to that table in that scenario. And I think to Sarah's point, it doesn't necessarily have to be people that are

risk professionals necessarily, but you know, there's various other individuals and functions within an organisation that can advise on how to mitigate, minimise and respond to risk. So there isn't a one rule fits all, but I think, you know, the nature of that role is definitely evolving and should continue to.

Tom Parker (36:10.67)
Well, we've come to our final question. It's a big one. So get out your crystal balls. But what does the next five years look like when it comes to boards dealing with risk? And perhaps also if you can offer some insight on whether the risk landscape will have changed or perhaps look very much the same. Sean, let's start with you.

Sean (36:31.616)
So it's hard to imagine that the risk landscape that we're currently experiencing and the amount and the pace of change is going to slow down anytime soon. In fact, it's probably likely to continue to speed up and likely to become more complex before it gets easier. So I think we...

we have to recognize that I think we are entering a period where tremendous uncertainty will continue to be the dominant feature of the world. And certainly when you look at it from a geopolitical point of view, we have been through a very long period of relatively stable conflict-free

geopolitical situation and what that has meant is we've seen world trade increase and we've seen barriers to trade generally being removed and we're now seeing the reverse trend arising. We are also in a situation where we are dealing with short-term challenges like conflicts and geopolitical short-term issues caused by the current political dynamic that we're seeing.

And whilst all that's going on, we are also facing some longer term trends that are definitely not going away and likely to become more urgent as time goes by. So if you look at the impact, the long term impact of climate change and also, you know, the scarcity of resources becoming an increasing challenge, which in itself will lead to likely future geopolitical.

So we've got short-term challenges, which are very, very dynamic right now, in addition to these longer-term trends that are going to shape the future of the world. So all of those things are going to be things we're going to have to manage our way through. We believe as insurers, we can bring insights into how it is that clients can navigate through both the short-term threats and challenges, but also dealing with those longer-term.

Sean (38:41.856)
trends that will impact their business into the future. And I think if we can get the partnership right, if we can bring the right insights, if we can manage the risks in the way that we've just been talking about, both from a board point of view, from an operational point of view, and then bringing insights that external parties like insurers can bring to clients, then I think there is a way to enable clients to take opportunities.

because I think we don't want to be in a world where we shrink away from challenges. We have to step into the challenges and find the way through because ultimately we have to continue to advance societies, but also advance the interests of businesses that will drive economic growth into the future. I think, you know, it's easy to come away from conversations like this feeling a bit despondent, but actually I think...

If we get this right and we can rise to the challenge, then we will find a way through. that is something that's quite exciting. It's challenging, it's difficult, it's dynamic, but I think it allows us to really step into the space and for an insurer to help a client really navigate their way through what is going to be quite challenging times.

Tom Parker (39:57.304)
Great, thanks Sean. Pam, do think we can rise to the challenge? What's your view of the next five years?

Pam Joshi (40:03.094)
I think so. think, you in agreement with with Sean's comments, the external environment is becoming more and more challenging. It's complex. There are geopolitical and regulatory shifts and, you know, the pressures that health care providers have on them, particularly in respect to tech advancement and budget pressure, is not to be ignored. But I would say with this in mind, think remaining vigilant and responding to

responding with strategies to ensure that businesses are focused on sustainable growth and operational resilience, I think is key. We talk about insurable risk. I think what's really important is that the use of data and AI will only increase as time goes on. So being ready for that and

proactively looking for insurable risk solutions for that sort of tech and AI space is really key. And also, I think, personally, my hope and aspiration is, and also to Sean's point, is that insurers and the industry in general are able to continue to provide solutions that will enable clients, insureds, buyers of insurance to...

prepare for those Blacks One events, those worst case scenarios, particularly in this very complex world we're in at the moment.

Tom Parker (41:36.43)
And Sarah, finally, what are the next five years for you?

Sarah Isted (41:40.112)
Well, very similar to Sean and Pam. I feel like the next five years are going to be more disruptive than the last five. And that might be geopolitical, that might be technology, that might be environmental reasons, there might be others we haven't even thought of yet. And I think to your point...

Tommy, it can be easy to worry about these things, both as individuals and as organisations, and to sort of think things are out of our control. Pam used the word vigilant, which I like, and I would say we need to be calm. You we need to be very focused.

We need to be curious about the future and learn so that we're ready for it. And I think as organisations, we need to think about how change can impact on our organisations positively. What are the opportunities that we can take from this? Focus on our agility, focus on building resilience. And I think if we do all of that, then I do really think organisations and individuals can thrive in the uncertain and unpredictable environment that we live in and no doubt will continue to live in.

Tom Parker (42:44.162)
Well, it's been fascinating insight from all. Thank you to everyone. It's certainly going to be an interesting next five months, let alone next five years. So thank you for all of your time today. And it's been a very productive next five board meeting. Thank you to Sean McGovern.

Sean (43:00.704)
Thanks, Tom. Really enjoyed the conversation.

Tom Parker (43:03.627)
to Pam Joshi.

Pam Joshi (43:05.41)
Thank you so much, Tom, and to Sean and Sarah, super insightful, really enjoyed it.

Tom Parker (43:10.434)
And finally, Sarah eyested.

Sarah Isted (43:12.381)
Thank you all, it's been great to have this conversation, really positive.

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TOM VO : In modern times, risks aren’t stand alone threats but interwoven forces buffeting boardroom decision making. Pivoting your business to near-term risks while maintaining long-term strategic goals requires an informed and steadfast leadership at board level. With companies under greater scrutiny from stakeholders, including regulators, boardroom competency surrounding strategic risk management is a key element of good corporate governance. Risk management can no longer be seen as a compliance driven tick box exercise but a regular strategic-focused activity. One key challenge faced by boards is developing the knowledge and the expertise to keep pace with the growing volume and variety of risks faced by organisations today. Companies need to ask themselves whether they have the appropriate cross-section of professionals with the correct skill sets to assess risk. Given the insights from today’s experts, boards are equipped to rise to the challenge, are willing to adapt and are ready to take on the known and unknown risks over the next five years.