The annual corporate governance training of directors and officers of publicly listed companies (PLCs) associated with the Lopez Group went virtual on Oct. 23 as conducted by the Institute of Corporate Directors (ICD).
The continuing education of professional directors and officers of listed companies is required by the Securities and Exchange Commission. In attendance were delegates from ABS-CBN Corporation, ABSCBN Holdings Corporation, First Gen Corporation, First Philippine Holdings Corporation, Lopez Holdings Corporation, Rockwell Land Corporation and Energy Development Corporation. Also attending as observers were officers of Lopez Inc. and some of its subsidiaries.
Sherisa Nuesa, ICD vice chair and fellow, discussed “Reshaping Risk Governance in a World of Unknowns.” She shared the results of a survey of 150 global board members published in the World Economic Forum. It showed that 90% of respondents will reassess the priority placed on “risks, internal controls and contingency plans,” 67% believe “COVID- 19 will change the way they operate” and 60% think the pandemic will change board roles and responsibilities, with the board members becoming more involved in strategic oversight and issues.
Another survey she shared was done by PwC and the Management Association of the Philippines from July 2020 to September 2020. Of 161 CEOs, 80% will increase investments in technology and digital transformation,” 50% see significant changes in business operations, and the top CEO priorities are products and services, strategic partnerships and collaborations, and talent/workforce.
A live poll during the webinar showed that the top two concerns company boards would likely focus on in 2021 are “business strategy and operations” (63%) and the “effect of economic recession” (54%). Forty-eight percent of attendees said that the top gap in the current risk management process of their company was in “making the risk management process value-adding to business” and 72% said leadership at various levels was a possible risk to their organization.
Nuesa said these results were not much different from the results of a similar poll conducted among a broader audience outside the Lopez Group. She encouraged companies to form cross-functional teams to identify, assess and mitigate risks holistically.
“Use enterprise-wide risk management as a strategic tool, especially in a crisis, to anticipate stresses, dissect choices and influences, enhance focus and awareness, and as a rallying point for your people,” Nuesa said.
Gina dela Vega-Cruz, crisis communication and leadership coach and a graduate member of ICD, differentiated crisis management from crisis communication.
“Crisis management is the corrective procedure to mitigate or lessen the damage caused by the crisis. Crisis communication is how you protect and defend your organization’s reputation against a public challenge. It encompasses all the organization’s responses with the mindset to avoid criticism and additiona or lingering negativity,” she said.
She recommended that crisis communication must be organized and given at regular intervals. As a way toward “crisis immunization,” she encouraged crisis literacy training for everyone in the organization to recognize a crisis when it occurs, and to have a ready response.
“Educate your employees. Encourage Black Box Thinking. Tell them to speak up when they see something that’s not right. Tell them who they can report to. Define your policies and procedures for this.”
“Black Box Thinking” is a book by British journalist Matthew Syed. It is about creating systems and cultures that enable organizations to learn from errors rather than being threatened by them. It is about “the willingness and tenacity to investigate the lessons that often exist when we fail, but which we rarely exploit.”
Dela Vega-Cruz also said media literacy is needed as part of the strategy to address the current demands of electronic media.
“In olden days, the media cycle was 24 hours. We had a day to prepare our statement for the next news broadcast. Today, we have a minute-byminute news cycle. There is breaking news every minute and anybody with a phone is a citizen journalist who can put you or your company on social media.” (Story/Photos by: Carla Paras-Sison)