A typical board meeting brings members up to date on operations, financial performance and development efforts. But, when all of the board’s time is spent reviewing the past, how is it driving change and growth? Board members should look beyond what happened last month and also consider forward-looking issues, including risk management and strategic planning.
Risk management involves a regular identification and evaluation of an organization’s internal and external risks. In this blog series, we’ll start by taking a look at two of the most foundational: technology and cybersecurity. While Boards are typically not involved in operational matters, members should have a full understanding of how the organization functions, including how it leverages technology to minimize risk and how efficiencies gained from technological automation can support strategic initiatives.
THE IMPORTANCE OF AUTOMATION
Companies of all sizes can benefit from automation. Technological advances bring opportunities for enhanced financial reporting and improved systems integrations. Companies that optimize automation tend to be more agile, responsive and better positioned to scale for future growth.
On the flipside of the benefits, not embracing technology and automation puts companies at risk in three main categories: operational, organizational and financial.
- Operational risk: Any organization that does not keep pace with technological improvements is at risk of falling behind its competition. Outdated technology systems slow down work processes and can negatively affect customer/stakeholder experience. Customers expect a baseline of technological capabilities and efficiencies. Boards should have a solid understanding of the business’ current deployment of technology and automation and the strategy to continually improve the customer experience through technology.
- Organizational risk: A talent shortage exists in finance and accounting. Professionals are leaving their jobs in record numbers. However, optimizing the use of automation can be a talent attraction and retention strategy. Technology and streamlining create efficiencies and allow team members to spend more time on higher level skills which enhances job satisfaction. Eliminating low value, manual work frees up valuable team resources and positions them to participate at a higher level.
- Financial risk: Is the organization generating timely and accurate financial data? Boards rely on this information to evaluate the organization’s performance and financial condition. However many companies lack the technology and streamlined processes to produce the kind of robust financial information critical to effective decision making.
While automation is crucial for today’s companies, board members must also be aware that technological advances come with their own risks. As more and more processes are automated, it’s crucial to have strong controls in place to keep everything working as needed and protect your organization and customers. Learn more about the importance of cybersecurity hygiene. Contact RKL LLP to learn more.