Like many companies during the 2008-2009 recession, P&F Industries was happy to survive. The board acknowledged that the world was changing and that the board would have to change as well if the company was to compete. In this episode, we hear about one board’s journey to form a Strategic Planning Committee, to which it added the responsibility of risk management several years later (now called the Strategic Planning and Risk Assessment Committee).
Howard Brownstein, a board member with P&F Industries, joins TK Kerstetter to describe the board’s decision to increase oversight focus of strategic planning and risk.
“[Strategic planning and risk] are connected, but we don’t force them into the same bucket,” said Brownstein, explaining how the committee works with management and then reports up to the full board.
Kerstetter and Brownstein dig deeper into the overlap between the committee’s strategy and risk management functions. Brownstein also outlines advice for other boards that are considering forming a committee around these two critical areas of board oversight.
What you want to end up with is a really valuable discussion with management on strategic planning and on risk. Begin with that in mind. What sorts of reports…are going to be needed that may not be in existence? What sorts of people are the best to have as part of that effort? Do you have them on the board or do you need to recruit someone?
As president of NACD’s Philadelphia Chapter, Brownstein encourages directors to take advantage of peer-exchange whenever their board is considering a new committee or board structure: “Do a little research. Look around. See what other companies are doing. We’re only one data point…Just get a feeling for how [your board] might go about it because every company’s different.”