Resilience is a key factor in companies’ competitiveness, underpinning their long-term survival and success. Being a resilient organisation does not simply mean being optimally prepared for critical events and able to tackle them appropriately. It also means being able to anticipate potential risks and to remain sustainably competitive and able to grow in a complex and uncertain market environment. Organisational resilience does not, therefore, depend solely on the work of management but also – and crucially – on the work of the Board of Directors. Against this backdrop, this edition of swissVR Monitor investigates how resilient companies are and how their Boards are ensuring organisational resilience.

Organisational resilience

Patchy implementation of resilience measures in most companies

Just one company in eight (12%) is implementing specific measures to maintain or boost resilience at all five levels of organisational resilience (financial, operational, people, reputational and environmental). This patchy picture leaves most companies potentially vulnerable to critical events and to the significant damage such events can cause. Large companies are likely to be implementing resilience activities at more levels than small companies.

Inadequate expertise is the major obstacle to companies’ resilience

Only a small number of companies are focusing their resilience activities at all five levels, which raises the question of why the majority are not. The main reasons cited by Board members are a shortage of staff with expertise in this area (45% of respondents) and that it is difficult to measure resilience (40% of respondents). Respondents from large companies are more likely to cite the difficulty of measuring resilience, a finding that is plausible: these companies work more intensively than smaller ones on resilience, and find it easier to recruit the staff to do so, so measurement is more likely to be cited as a major obstacle.

When asked to consider the future, Board members identify a range of current global trends as posing a challenge to their company’s resilience over the next 12 months. The main trends they identify are financial stability (42%), acquiring new customers (37%), and their company’s human resources strategy (35%). These findings indicate that their focus is on financial, operational and people resilience.

Resilience briefings by management need to be increased

Just one Board member in eight reports that their Board receives regular briefings from management on all five levels of resilience. In one company in ten, such briefings are restricted to a single level of resilience, which means that the flow of information from management to the Board of Directors is very limited. Resilience briefings are less comprehensive in small companies than in large ones.

Comprehensive resilience briefings boost Boards’ awareness of critical events

The more levels of resilience briefings cover, the better informed Board members are about critical events within the company, from slumps in demand and staffing problems to hacking attacks. Specifically, almost half of survey respondents who report that they receive resilience briefings on four or five levels of resilience also report being aware of a critical event within the company over the previous two years. Where briefings take place on fewer levels of resilience, this proportion falls to just one-third of responses.

Economic, sector and business outlook

Economic outlook growing gloomier

More Board members rate the outlook for the Swiss economy over the next 12 months as negative than rate it as positive. Their rating of the economic outlook is also gloomier than in the two previous editions of swissVR Monitor. Reasons for this include turbulence in global trade, which is unsettling Swiss businesses and its major trading partners: operating margins are coming under pressure and companies are either postponing or cutting investment.

Organisational issues facing the Board of Directors

Large companies and the financial services sector most likely to have Board committees

Almost half of Boards have set up committees to tackle individual issues. The proportion ranges from a quarter of Boards in small companies to three-quarters of Boards in large companies. Boards in the financial services sector are most likely to set up committees, with seven out of ten across the sector having at least one committee. In most other sectors, fewer than half of Boards have one or more committees. However, many Boards allocate special responsibilities or specific areas to individual members.

Interviews

About the survey
 

swissVR Monitor is based on a survey carried out jointly by swissVR in collaboration with Deloitte and the Lucerne University of Applied Sciences and Arts. The aim of this bi-yearly survey is to gauge Board members’ attitudes to the outlook for the economy and business as well as corporate governance issues. swissVR Monitor also aims to share with the wider public the ways in which Board members perceive their role and the current economic situation. Each edition also explores a special focus topic and conducts interviews with experts. A total of 348 Board members took part in the current edition of swissVR Monitor, providing a good overview of the views and challenges facing board members in Switzerland.