The first blog on ADM Risk, Regulation & Strategy Ltd’s website appears alongside the recent publication of my thought leadership article on CIOsuccess.com. The article argues for the need to revisit corporate governance codes and reframe them in terms of three Rs: Resilience, Responsibilities, and Relationships.

It is a product of numerous webinars and zoom calls that I listened to and participated in over the covid19 lockdown. The term “resilience” is now frequently deployed, but there is little discussion of what it means and/or how it could be used to help boards determine their priorities in a business context where firms are also being scrutinised for how they manage their responsibilities (to their employees and suppliers) and their stakeholders.

This is a complex subject, so the article aims to help initiate a wider discussion of the corporate governance reform and contribute to it. Financial services firms will need to develop new strategies aimed at creating digital resilience, ensuring key business services remain operationally resilient, and rebalancing business their models in the face of climate change. These strategies will also inform their relationships with supervisors, investors, and clients (retail and wholesale). In particular, from a prudential perspective, the scope of Pillar 2 capital is already evolving to consider FS firm resilience on these three fronts.

Moreover, the digital capabilities will have a direct impact on the management of key business services and the risks arising from client relationships. In terms of the latter, these relationships could shift rapidly in the face of assets becoming stranded as the economy moves away from fossil fuels and the appetite for energy-efficient homes grows.

In the weeks to come, I hope to investigate some of these issues further, alongside regulatory and political developments affecting financial services firms.

Anita D. Millar

Posted in Business Resilience