From Oversight To Foresight: Awakening Risks Boards Routinely Ignore
Corporate boards have long relied on a single approach to risk management—one that prioritises well-understood threats. Over the past 20 years, directors have focused on quantifiable hazards like credit defaults, regulatory breaches, and operational failures. But a new framework, called dual-framing, is gaining attention for its ability to uncover hidden dangers before they escalate.
Traditional risk assessment in boardrooms operates under two main perspectives: the ‘what if’ frame and the ‘what if not’ frame. The first favours procedural safety, reinforcing existing business models but often missing paradigm shifts. The second, however, challenges assumptions by questioning what could be overlooked.
Most boards excel at managing *dormant risks*—those that are visible, measurable, and short-term. These fit neatly into audits and compliance checks. Yet *awakening risks*, which are harder to quantify or predict, often go unnoticed until they become crises. History shows that companies rarely collapse from mismanaging known threats; instead, they fail by ignoring risks that don’t fit traditional frameworks. To address this gap, experts propose three core principles for dual-framing: selecting frames deliberately, applying equal rigour to both perspectives, and accepting ambiguity. By embedding this approach, boards shift from reactive governance to strategic stewardship. This change strengthens resilience and fosters innovation. The responsibility for introducing dual-framing often falls to CEOs and CHROs. Their strategic and cultural influence makes them best placed to implement such cognitive shifts in decision-making.
Adopting dual-framing could transform how boards assess risk. By balancing ‘what if’ and ‘what if not’ thinking, directors gain a clearer view of both immediate and emerging threats. The result is a more adaptive, forward-looking governance model that reduces blind spots in corporate strategy.
Read also:
- Executive from significant German automobile corporation advocates for a truthful assessment of transition toward electric vehicles
- Crisis in a neighboring nation: immediate cheese withdrawal at Rewe & Co, resulting in two fatalities.
- United Kingdom Christians Voice Opposition to Assisted Dying Legislation
- Democrats are subtly dismantling the Affordable Care Act. Here's the breakdown
