• CHISOM OBIUDOIT IS NO surprise that corporate behaviour is generating unprecedented levels of scrutiny due to changes in the economic, technological, and environmental landscapes.
There is also a greater emphasis on ethical business practices and associated behaviours, reinforced by tighter regulatory frameworks.
The ripple effects of the Covid-19 pandemic brought about a wave of technological developments.
As most companies adapt to the opportunities presented by technology, the emergence of cybersecurity issues and innovative business models should form part of their strategic focal points going forward.
Companies which lack foresight face the danger of being blindsided in their strategy and decision-making, because of all these developments.
In light of this, the following are my forecasts for the top-three hurdles Namibian corporate boards will face in the coming years.
EMERGING TECHNOLOGIES
In July 2021, president Hage Geingob appointed an eight-member task group to prepare Namibia for the fourth Industrial Revolution.
The fourth Industrial Revolution (4IR) symbolises a new age of technological innovation to improve human-machine interaction, open new market possibilities, and boost global economic development.
We will soon see a disruption of existing business models and operational processes by new digital entrants in every industry.
As a result, digital and emerging technologies will force businesses to fundamentally change their strategy, consumer reach, marketing, human-resource efforts, and supply-chain management.
According to PwC’s 20th annual chief executive officer (CEO) survey, nearly a quarter of CEOs across the globe identified innovation, digital and technological capabilities as their top priorities over the next few years. However, the effect of technological innovations will vary depending on the type of company and industry.
The emerging technologies that will have the most significant global impact across industries are artificial intelligence, blockchain, the Internet of Things (IoT), robots, and augmented reality.
Therefore, if boards with ‘slow and steady wins the race’ mindsets do not fill their technology intelligence gap, their companies will face stiff bottlenecks when investing and utilising new technologies, and will be overtaken by more agile and savvy players.
FRAUD, CYBERCRIME
There have been reports of cybercrime and data breaches on international news sites. These incidents show that cybercriminals are becoming increasingly sophisticated in breaking through firewalls, selling credit-card information, releasing confidential data, and holding companies to ransom.
With the advancement of artificial intelligence, organisations are becoming increasingly vulnerable to fraud, scams, and security breaches directed against the company’s executives, workers, and consumers.
Now that working from home has become the norm for some organisations, the risk of proliferation of ransomware and the IoT presents a whole new frontier of vulnerabilities, making the years 2021 and beyond a challenging period for companies in any sector.
In 2018 Deloitte conducted a cybersecurity survey of public and private organisations in Namibia.
The findings revealed a lack of awareness of cybersecurity threats, no strategic direction and oversight for managing information assets, and the delegation of cybersecurity responsibilities to the wrong person.
This report is a cause for concern from a board governance perspective. A data security breach may have severe consequences for companies, including regulatory investigations, intellectual property loss, and financial risk from fraudulent transactions.
Therefore, governance advisers should ensure that the tone at the top exhibits a sense of urgency around cybercrime risks, which should trickle down to all company employees, as this is an existential threat to the organisation in the digital age, and not just a problem affecting others.
The board holds the CEO and chief information security officer (Ciso) accountable, so a highly skilled and knowledgeable cybersecurity specialist is required to respond to cybersecurity risks.
The Ciso should also embed their organisation’s approach to cybersecurity within the organisation’s overall approach to enterprise risk management, and should engage with board members to ensure they understand the issues at hand.
CLIMATE CHANGE
Previously, climate change was regarded as a distinct issue from the board’s strategic responsibilities, and was not considered part of a director’s oversight role.
However, as the global pressure on governments to act on climate change grows, boards are encouraged to incorporate climate governance into their strategic and oversight duties.
The 2020 World Economic Forum Global Risk Report identified extreme weather, climate action failure and natural disasters as the top-three probable risks that could impact the organisation’s sustainability.
About three quarters of respondents indicated that climate-change impacts have negatively impacted their business revenue.
In light of this, any corporate strategy recommended by the board should incorporate a range of possible climatic scenarios to reassure directors that their decisions would be resilient in the face of climate change.
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