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RISK AND STRATEGYunderstand the potential impact of these risks and prioritise management effortto manage them accordingly.SOME OF THE KEY QUESTIONS THAT BOARDS SHOULDASK AROUND STRATEGY AND RISK ARE:How well is my strategy actually defined?A good understanding of the key risks to strategic intent and the value of theorganisation require a good understanding of the strategy itself. A robustarticulation of the key elements of strategy (strategic intent, strategicdrivers/actions, the context within which the strategy will be delivered etc.) willallow boards to isolate and identify how the strategy will interact with the risksfaced by the business. A lack of clarity around the strategy will encourage riskand strategy to continue as two separate processes within the organisation.Bringing these processes together will help align risk management to thestrategic delivery plan.How broad are the risks we are considering?Strategy needs to be defined in the context of the risk environment in which thebusiness operates. The broader the consideration of the types of risks thebusiness faces, the better the strategy can be developed to respond to or navigatethese risks. Bringing together the internal risk information from the businesswith an understanding of exogenous risk exposures as highlighted by seniormanagement and NEDs in particular, should be a key focus of the board.What risk scenarios have we considered to test our plans?It is often not easy to identify all potential risk exposures and their causes. Thoserisks that are going to be of most interest to the board will often be defined by thepotential impact of the consequences of the risk manifesting. Scenario analysis,where the board encourages management to consider a range of scenarios thatresult in significant adverse consequences for the business, can help ensure thata wider breadth of risk impacts are considered. Workshops with NED input tounderstand the range of plausible scenarios around key strategic outcomes are agood way to bring this type of approach to the boardroom.37