Get Your Board Comfortable With Taking Calculated Risks

Because of their fiduciary responsibilities to their associations, board members can often be overly cautious. But in the current environment, experts say, boards must be willing to take calculated risks to help their organizations thrive.

“What our associations are operating in now is what I refer to as the ‘discontinuous next,’ which is an ongoing period of uncertainty, volatility, and risk that’s not going away,” said Jeff De Cagna, FASAE, executive advisor for Foresight First, LLC. “Every decision, therefore, is higher stakes, and every board needs to change its perspective on risk from the idea that something is either risky or not, but rather to say that every decision involves risk.”

More importantly, today’s climate of rapid change means a risk-averse board often stifles organizational growth and puts an association at a disadvantage. “When boards are slow to react, they really miss opportunities,” said Barbara Arango, CAE, executive director of the Illinois Parks and Recreation Association.

That’s why CEOs must encourage their boards to adapt quickly to the changing landscape and embrace risks.