Rethinking Risk And Control For The Modern FMCG Enterprise
Debbie Morrison • March 2, 2023

Despite risk management dominating many board agendas, Australian companies have repeatedly proven unprepared for recent shocks such as the COVID-19 pandemic, supply chain disruptions, labour shortages, the Great Resignation and cybersecurity events.


A 2021 EY survey of more than 500 global board members revealed that risk management today typically lacks focus on emerging and atypical risks, is not always aligned with business strategy and is too entrenched in the here and now. 


The result? Disruptions to supply chains lost revenue and reputational damage as a result of cyber-attacks have become commonplace for Australian companies. More than half of respondents said they had experienced one or more of these risks in their last three years of operation.


The same EY survey found that boards are failing to focus on strategic issues such as transformation planning because they are too bogged down in the minutiae of financial reporting and traditional risk and compliance: 43% of board members spend the most time on financial reporting, but only 18% think this is important.


With greater regulatory enforcement of board requirements around fiduciary duties, balancing the necessary risk and compliance tasks with a focus on emerging risks, and challenges of tomorrow is becoming increasingly burdensome for boards.


Risk management is under pressure to evolve as a result of a shifting landscape and changing stakeholder expectations – it’s time for boards to rethink their appetite and approach to risk.


How can boards free themselves to focus on the big picture?



Revamp board composition

One way that boards can gain greater perspective on emerging risks is to review their current skills gaps and objectively ask themselves whether the current board composition is adequately equipped to cope with future and atypical risks.


While we are not advocating a radical overhaul of the board immediately, we see value in boards seeking out a broader range of perspectives by engaging with external subject matter experts, considering broader talent pools from different industries and less conventional backgrounds in addition to regularly engaging in programs such as reverse mentoring.

By developing a diverse pipeline of leaders for succession planning purposes, boards can expand their horizons when it comes to thinking strategically about emerging risks.


Boards should consider new directors who:

•    Understand emerging risks

•    Have expertise in complex technology platforms used by the organisation

•    Know the issues and best practices in the company’s industry or parallel industries

•    Make the board more diverse

•    Have a good understanding of digital transformations and the underlying value proposition

•    Can communicate the strengths, weaknesses, opportunities, and threats posed by management's proposed strategic approaches and tactical implementation plans



Promote greater diversity at board level

In spite of the almost daily debate about diversity in the global media, it seems boards are not convinced that evaluating board composition and augmenting skill sets would improve risk management oversight.


Only 30% of boards believe this would be effective, according to a survey from Ernst & Young. And only 6% of C-suite executives anticipate significant changes in leadership within the next 12 months, according to their Capital Confidence Barometer.


64% of boards say their organisations can effectively manage traditional risks including changes in regulation, drops in demand and increased borrowing costs. 


Yet only 39% say their organisations can effectively manage atypical and emerging risks--such as threats associated with new technology, cybersecurity, the impact of climate emergencies--or internal risks.


This disconnect suggests that boards continue to remain stifled by short-term thinking and the priorities associated with traditional risks. Increasingly, it is critical to consider a longer time horizon when assessing strategy and risk – ideally more than five years – especially where emerging and atypical risks are concerned.


In today’s rapidly evolving business environment, ‘Big Picture’ thinking not only in terms of risk management but also in board composition is an essential element of effectively navigating future risks.


The biggest risk for organisations is not taking risks. In order to echo the customers, employees, stakeholders and communities they serve, boards must design their current and future composition to include a diverse perspective in the boardroom. Without this diversity, boards are unlikely to be as effective and therefore competitive going forward.


For example, Research shows that female representation on boards can be linked to better financial performance and better climate governance and innovation. By adding greater diversity to board compositions, boards can enhance the technical skillsets that are relevant to their unique operating environment and onboard individuals with greater soft skills such as collaboration, creativity and constructive challenge to unlock untapped thinking.



Leverage Technology


Boards should also look beyond their composition and structure to focus on how they can free themselves for more focused and strategic discussions that will lead to better decision-making.


One way boards can achieve this is by limiting the time spent on routine and administrative tasks. Technology – and artificial intelligence in particular – can be very helpful in reading, reviewing and validating financial reporting. 


Equally, analysing large volumes of data over time using artificial intelligence can quickly establish trends and patterns that would have taken years to uncover due to the scope and speed of improvements that AI brings.


For example, The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry found that banks had failed to put customers first. A culture that puts customers first is critical for long-term success in a competitive market.


Directors need to ensure that their organisations are competitive and ethical in their use of data. Large-scale data and AI usage is frequently the differentiator between thriving companies, which use these technologies to understand their customers and those that are failing to meet industry standards or not competing effectively.


However, fewer than one in five boards say their organisation is highly effective at leveraging data and technology or delivering timely, insight-driven reporting to the board. 


What boards can do:

  1. Put customer data on the agenda: Formally discuss how your company uses data, analytics and AI to win in a world where these technologies are growing in importance.
  2. Assess skill levels and cultural barriers to data-driven decision-making: Which skills are needed?
  3. Benchmark how you use customer data: How does your organisation stack up with competitors when it comes to leveraging data and artificial intelligence to mitigate risk?
  4. Seek expertise: Take advice on Data use and how this relatively new and complex tool can be used to help expedite better decision-making and risk management.


Naturally, boards must ensure that any data or AI strategy is embedded in their enterprise strategy. And that means ensuring that there is robust governance over the ethical use of AI, so that it doesn't lead to unintentional bias and discrimination in order to build trust in AI and mitigate reputational risk.

Creating a culture and operating environment where customer signals can be identified, analysed and integrated into automated decision-making processes is the governance challenge of our times. Boards that are good at learning this will see exponential returns.



Embed purpose in governance and strategy

While there are significant threats today, the opportunities for strategic success are even greater. Technology disruption and sizeable shifts in customer expectations present significant risks for organisations but at the same stroke offer strategic opportunities for boards.

Stakeholders expect companies to drive societal impact, environmental sustainability, and inclusive growth. And 78% of respondents believe that a focus on sustainable and inclusive growth has been critical to building trust with stakeholders in today's uncertain times.


In today's rapidly changing business environment, organisations need to be able to adapt at a moment's notice. In order to do so, they must have a clear sense of their purpose and how it aligns with their strategy. This can help board members guide their companies through disruptive times and seize transformational opportunities.


One way to align your organisation's culture with its purpose is to consider compensation plans that reward board members, executives, and employees based on their progress in delivering long-term value to stakeholders in line with the business's purpose-led strategy. This can help build a culture that is more deeply aligned with organisational purpose


Questions for boards to consider:

  1. Have you developed an active dialog with executive management about the role of artificial intelligence in reviewing and validating data to uncover insights into enterprise risks and opportunities?
  2. Are you aware of the mechanisms and processes in place to ensure diversity is a key consideration or design principle when appointing new board members?
  3. Do you have confidence that the purpose of your organisation, its board and individual directors is clear, understood and put into practice?



At ELR Executive we have over 20 years experience, ensuring we identify the right leadership talent for our clients boardrooms. If you'd like to learn more about how we can help you hire the right leadership talent, who can navigate your business forward, securing its competitive advantage to thrive in new markets, speak to us today.

Your Culture Report Won’t Show You This

By John Elliott • June 6, 2025
On paper, they were fully resourced. No complaints logged. No formal red flags. Delivery metrics holding steady. But behind closed doors, the signs were there. Delays. Fatigue. Silence in meetings where pushback used to live. And a growing sense that key people were leaning out, emotionally, if not yet physically. When the cracks finally showed, the conclusion was predictable: “We need more people.” But that wasn’t the real problem. The problem was trust. And most organisations never see it until it’s too late. The Hidden Cost of Disengagement In Gallup’s 2023 global workplace report , only 23% of employees worldwide reported being actively engaged at work. A staggering 59% identified as “quiet quitting”, psychologically detached, going through the motions, doing only what their job description demands. Source: Gallup Global Workplace Report 2023 Disengagement is expensive. But it’s also quiet. It doesn’t show up on a balance sheet. It doesn’t send a Slack message. Disengagement isn’t new, just silenced. And in executive teams, it looks different. It looks like polite agreement in strategy meetings. It looks like leaders shielding their teams from unrealistic demands, instead of confronting the system causing them. It looks like performance metrics still being met… while people emotionally check out. The issue isn’t always capability. It’s safety. Psychological, political, and professional. Many senior leaders don’t raise concerns, not because the problem isn’t real, but because they don’t believe they’ll be heard, supported, or protected if they do. And this is where the failure begins. The Leadership Lie No One Talks About We talk a lot about leadership capability. About experience, commercial acumen, execution strength. But we don’t talk enough about context. Every leadership hire walks into a culture they didn’t create. They inherit unwritten rules, quiet alliances, and legacy power structures. If those dynamics are broken, or if trust is fractured at the top, no amount of capability will compensate. According to a 2022 Deloitte mid-market survey, 64% of executives said culture was their top strategic priority. But only 27% said they actually measured it in a meaningful way. We say culture matters. But we rarely structure around it. And so new leaders walk in with pressure to perform, but little real insight into what the role will cost them emotionally, politically, or personally. We Don’t Hire for Trust. And It Shows. In executive search, the conversation is often dominated by pedigree and “fit.” But fit is often a euphemism for sameness. And sameness doesn't build trust, it maintains comfort. We rarely ask: Does this leader know how to build trust vertically and horizontally? Can they operate in a low-trust environment without becoming complicit? Will they challenge inherited silence, or unconsciously uphold it? Instead, we hire for confidence and clarity, traits that often mask what’s broken, rather than reveal it. And when those hires fail? We call it a mismatch. Or we cite the usual: “lack of alignment,” “wasn’t the right time,” “they didn’t land well with the team.” But the truth is often uglier: They were never set up to succeed. And no one told them until it was too late. The Cultural Infrastructure Is Missing One of the most damaging myths in leadership hiring is that great leaders will “make it work.” That if they’re tough enough, experienced enough, skilled enough, they’ll overcome any organisational dysfunction. But high-performance isn’t just personal. It’s systemic. It requires psychological safety. A clear mandate. The backing to make hard decisions. The freedom to speak the truth before it becomes a PR problem. When that infrastructure isn’t there, when the real power dynamics are unspoken, good leaders stop speaking too. And the silence spreads. What Trust Breakdown Really Looks Like Often, the signs of a trust breakdown don’t show up in dramatic ways. They surface subtly in patterns of underperformance that are easy to misread or excuse. You start to notice project delays, but no one flags the root cause. Teams keep things moving, quietly compensating for the bottlenecks rather than surfacing them. Not because they’re careless, but because they’ve learned that early honesty doesn’t always earn support. New leaders hesitate to make bold calls. Not because they lack conviction, but because the last time they did, they were left exposed. Board reports look flawless. Metrics track nicely. But spend five minutes on the floor, and the energy tells a different story. These are not resource issues. They’re relationship issues. And the data backs it. According to Gallup’s 2023 State of the Global Workplace report , just 23% of employees worldwide are actively engaged. Worse, around 60% are “quiet quitting.” That’s not just disengagement. It’s people doing only what’s safe, only what’s required, because trust has quietly eroded. Gallup also found that managers account for 70% of the variance in team engagement, a staggering figure that reinforces just how pivotal leadership trust is. When people don’t feel psychologically safe, they shut down. Not dramatically. Quietly. Invisibly. What’s breaking isn’t the org chart. It’s the ability to speak plainly and be heard. And by the time it’s visible? The damage is already done, and someone calls for a restructure. “Low engagement is estimated to cost the global economy $8.8 trillion, 9% of global GDP.” Gallup, State of the Global Workplace 2023 So What’s the Real Takeaway? If you’re seeing performance issues, before you jump to headcount, ask a different question: Do the leaders in this business feel safe enough to tell the truth? Because if they don’t, the data you’re reading isn’t real. And if they do, but you’re not acting on it, then they’ll stop telling you. Leadership doesn’t fail in obvious ways anymore. It fails in the gap between what people know and what they’re allowed to say. And the price of that silence? Missed opportunity. Reputational damage. Cultural decay. Sometimes, the problem isn’t who you hired. It’s what you’ve made it unsafe to say.

The Energy’s Gone, But Everything Still Looks Fine

By John Elliott • May 27, 2025
Why Culture Decay in FMCG Is a Silent Threat to Performance It doesn’t start with resignations. It starts with something much quieter. A head of operations stops raising small problems in weekly meetings. A sales lead no longer defends a risky new SKU. A team member who used to push ideas now just delivers what they’re asked. Nothing breaks. Nothing explodes. It just... slows. And from the outside, everything still looks fine. The illusion of stability In food and beverage manufacturing, where teams run lean and pressure is constant, performance often becomes the proxy for culture. If products are shipping, if margins are intact, if reviews are clean, the assumption is: we're good. But that assumption is dangerous. According to Gallup's 2023 global workplace report, only 23% of employees worldwide are actively engaged, while a staggering 59% are "quiet quitting ", doing just enough to get by, with no emotional investment. And in Australia? Engagement has declined three years in a row. In a mid-market FMCG business, those numbers rarely show up on dashboards. But they show up in other ways: New ideas stall at the concept phase Team members stop challenging assumptions Execution becomes rigid instead of agile Everyone is "aligned" but no one is energised And by the time the board sees a drop in revenue, the belief that once drove the business is already gone. The emotional cost of cultural silence One thing we don’t talk about enough is what this does to leadership. When energy drains, leaders often become isolated. Not because they want to be, but because the organisation has lost the instinct to challenge, question, or stretch. I’ve seen CEOs second-guessing themselves in rooms full of agreement. Seen GMs miss red flags because nobody wanted to be "the problem". Seen founders mistake quiet delivery for deep buy-in. The emotional toll of unspoken disengagement is real. You’re surrounded by people doing their jobs. But no one’s really in it with you. And eventually, leaders stop stretching too. We train people to disengage without realising it Here’s the contradiction that most organisations won’t admit: We say we want initiative, but we reward obedience. The safest people get promoted The optimists get extra work The truth-tellers get labelled difficult So people learn to conserve energy. They learn not to challenge ideas that won’t land. They learn not to flag risks that won’t be heard. And over time, they stop showing up with their full selves. This isn't resistance. It's protection. And it becomes the default when innovation is punished, risk isn't buffered, and "alignment" becomes code for silence. Boards rarely see it in time Boards don’t ask about belief. They ask about performance. But belief is what drives performance. When culture begins to fade, it doesn't look like chaos. It looks like calm. It looks like compliance. But underneath, the organisation is hollowing out. By the time a board notices the energy is gone, it’s often because the financials have turned, and by then, the people who could've helped reverse the trend have already left. In a 2022 Deloitte study on mid-market leadership, 64% of executives said culture was their top priority, yet only 27% said they measured it with any rigour . If you don’t track it, you won’t protect it. And if you don’t protect it, don’t be surprised when it disappears. The real risk: you might not get it back Here’s what no one likes to admit: Not all cultures recover. You can try rebrands. You can run engagement campaigns. You can roll out leadership frameworks and off-sites and feedback platforms. But if belief has been neglected for too long, the quiet ones you depended on, the culture carriers, the stretchers, the informal leaders, they’re already checked out. Some have left. Some are still there physically but not emotionally. And some have started coaching others to play it safe. Once that happens, you're not rebuilding. You're replacing. So what do you do? Don’t listen for noise. Listen for absence. Absence of challenge. Absence of stretch. Absence of belief. Ask yourself: When was the last time someone in the business pushed back? Not rudely, but bravely? When did someone offer an idea that made others uncomfortable? When did a leader admit they were unsure and ask for help? Those are your indicators. Because healthy culture isn’t silent. It’s alive. It vibrates with tension, disagreement, contribution and care. If everything looks fine, but no one’s really leaning in? That’s your problem. And by the time it shows up in the numbers,t might already be too late.