Building Resilience and Bridges to Weather Risks

As an ever-evolving risk landscape expands the roles of business leaders, they must be ready to build the cross-functional connections necessary to navigate new threats and enable growth. These leaders must seek out expertise from across their businesses, as well as trusted outside partners, to translate their risk awareness into productive action.

Put another way, leaders who prioritize internal relationships empower themselves to strengthen defenses and mitigate risks. Doing so takes more than a friendly or gregarious personality: It requires intentional bridge-building across an organization.

Strengthening Internal Relationships

Cultivating interpersonal connections across the business should be a core component of every leader’s mission. These relationships are the foundation of a resilient culture.

Leaders must have a deep understanding of their organization’s unique risk profile. In service of this need, they should work with partners from across the business to proactively identify risks and ideate strategies to address them. It takes a concerted effort to develop open communication channels and foster this type of proactive culture, but the benefits can be transformational.

Let me share three specific bridge-building strategies and the associated benefits I have witnessed:

Breaking Down Silos

Breaking down silos across an organization creates greater alignment between leaders, improving resilience, enhancing decision-making and unlocking the full potential of its people.

Take risk managers, for instance. Due to the inherently broad nature of their roles, risk managers are uniquely empowered to break down cross-firm barriers at the nexus of finance, compliance and operations. By quarterbacking coordination efforts between these functions, they can streamline processes across teams and help their organization mitigate risks.

BDO’s Eskander Yavar: Reinforce cross-functional support.

Building bridges across functions becomes especially crucial when new regulations or reporting requirements are enacted. These events present opportunities for mutual education and strengthened collaboration between internal stakeholders.

For example, the Securities and Exchange Commission recently released new cybersecurity disclosure rules. They require public organizations to disclose material cybersecurity events within a four-day window of determining materiality to a reasonable investor.

Materiality determinations, however, are not black and white. To meet such a tight reporting deadline, an organization must make decisions quickly and with full support from the applicable teams. Risk managers can facilitate dialogue between the legal, compliance and security teams – and ultimately help the organization meet strict reporting deadlines, avoid fines, inform shareholders and mitigate cybersecurity and financial risks.

Rather than waiting to act in reaction to an incident, organizations should build connections and reinforce their bench of cross-functional support now.

Shared Goals and Cross-Functional Coordination

Several leaders across the organization are responsible for the financial stability and growth of the business. Yet they aren’t always aligned when it comes to the strategic value of their respective functions.

Take CFOs and tax leaders, for example. At times, there may be a disconnect between the tax function’s goals and abilities and the CFO’s expectations or understanding. Failure to build a coordinated approach can inadvertently limit the strategic ability of the tax function, leading to missed opportunities and potential increased tax risk or liability.

Tax leaders need to understand how the CFOs’ role is evolving and learn to speak the language of business beyond tax – in both a literal sense and in how they track tax performance and report on their contributions. By proactively defining and communicating the tax implications of business decisions and policy shifts, especially regarding their bottom-line impacts, tax leaders illustrate the strategic value of their teams.

CFOs should work closely with tax leaders to define KPIs (key performance indicators) that elevate the tax team’s influence and reinforce their impact on the business. The CFO should champion their tax function and make sure the tax team has access to cross-functional resources and support. When working together to integrate knowledge and build a shared vernacular, these leaders strengthen one another’s efforts.

Leading with Empathy

Although organizations have found some reprieve from the tight labor market and high attrition rates of recent years, workforce engagement remains a chief priority. Sixty-six percent of CFOs plan to maintain or increase their involvement in workforce strategy this year, according to BDO’s 2024 CFO Outlook Survey. As CFOs and other leaders’ roles evolve, they are more often called on to address talent risks and optimize the company’s most valuable asset: its people.

This starts with keeping an open door for all leaders to voice their needs and raise feedback. By fostering trust with key internal stakeholders like the chief talent or people officer, CFOs and other leaders can glean valuable insights.

These strong relationships are especially important when companies undergo strategic transformations and the uncertainty that comes with them. When implementing hybrid or in-office policies, rolling out new technologies, or preparing for a merger, for example, taking the time to listen and engage from a place of empathy should be the first step in navigating potential workforce risks. Leaders should also actively listen to employees firsthand. By participating in forums, focus groups, town halls and more, they can hear employees’ concerns, perspectives and needs directly.

This level of connection allows leaders to better understand, plan for, and address talent challenges and identify the seeds of risk before they grow.

Foundation for Resilience

Today’s risk environment is too volatile to navigate alone. Business leaders and their teams will benefit from forming and nurturing relationships across their organizations – increasing their understanding of the risks they face and proactively building resilience.

As a company creates or enhances its enterprise risk management processes, leaders can benefit from listening to a range of professionals from across its ranks. These relationships also help improve agility – an organization can react more promptly to risk when it operates on a foundation of trust and shared understanding.

Even when weathering uncertainty, when your leadership is authentic and you’ve taken the time to listen to perspectives from across your organization, you have the strength of a collective behind you – you’re not an office of one.

Eskander Yavar is National Managing Principal of Advisory, BDO.