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.


By John Elliott June 26, 2025
You don’t hear about it on the nightly news. There’s no breaking story. No panic. No protests. Just rows of vegetables being pulled out of the ground with no plan to replant. Just farmers who no longer believe there’s a future for them here. Just quiet decisions — to sell, to walk away, to stop. And if you ask around the industry, they’ll tell you the same thing: It’s not just one bad season. It’s a slow death by a thousand margins. 1 in 3 growers are preparing to leaveIn September 2024, AUSVEG released a national sentiment report with a statistic that should have set off alarms in every capital city: 34% of Australian vegetable growers were considering exiting the industry in the next 12 months. Another one-third said they’d leave if offered a fair price for their farm. Source: AUSVEG Industry Sentiment Report 2024 (PDF) These aren’t abstract hypotheticals. These are real decisions, already in motion. For many, it’s not about profitability anymore, it’s about survival. This isn’t burnout. It’s entrapment. Behind the numbers are people whose entire identity is tied to a profession that no longer feeds them. Many are asset-rich but cash-poor. They own the land. But the land owns them back. Selling means walking away from decades of history. Staying means bleeding capital, month by month, in a system where working harder delivers less. Every year, input costs rise, fuel, fertiliser, compliance. But the farmgate price doesn’t move. Or worse, it drops. Retail World Magazine reports that even though national vegetable production increased 3% in 2023–24, the total farmgate value fell by $140 million. Growers produced more and earned less. That’s not a market. That’s a trap. What no one wants to say aloud The truth is this: many growers are only staying because they can’t leave. If you’re deep in debt, if your farm is tied to multi-generational ownership, if you’ve invested everything in equipment, infrastructure, or land access, walking away isn’t easy. It’s a last resort. So instead, you stay. You cut your hours. Delay maintenance. Avoid upgrades. Cancel the next round of planting. You wait for something to shift, interest rates, weather, prices and you pretend that waiting is strategy. According to the latest fruitnet.com survey, over 50% of vegetable growers say they’re financially worse off than a year ago. And nearly 40% expect conditions to deteriorate further. This isn’t about optimism or resilience. It’s about dignity and the quiet erosion of it. Supermarkets won’t save them, and they never planned to In the current model, supermarket pricing doesn’t reflect real-world farm economics. Retailers demand year-round consistency, aesthetic perfection, and lower prices. They don’t absorb rising input costs, they externalise them. They offer promotions funded not by their marketing budgets, but by the growers’ margins. Farmers take the risk. Retailers take the profit. And because the power imbalance is so deeply entrenched, there’s no real negotiation, just quiet coercion dressed up as "category planning." Let’s talk about what’s actually broken This isn’t just a market failure. It’s a policy failure. Australia’s horticulture system has been built on: Decades of deregulated wholesale markets Lack of collective bargaining power for growers Retailer consolidation that has created a virtual duopoly Export-focused incentives that bypass smaller domestic producers There’s no meaningful floor price for key produce lines. No national enforcement of fair dealing. No public database that links supermarket shelf price to farmgate return. Which means growers, like James, can be driven into loss-making supply contracts without ever seeing the true economics of their product downstream. But the real silence? It’s from consumers. Here’s what no one wants to admit: We say we care about “buying local.” We say we value the farmer’s role. We share those viral posts about strawberries going unsold or milk prices being unfair. And then we complain about a $4 lettuce. We opt for the cheapest bag of carrots. We walk past the "imperfect" produce bin. We frown at the cost of organic and click “Add to Cart” on whatever’s half price. We’re not just bystanders. We’re part of the equation. What happens when the growers go? At first, very little. Supermarkets will find substitutes. Importers will fill gaps. Large agribusinesses will expand into spaces vacated by smaller players. Prices will stay low, until they don’t. But over time, we’ll notice: Produce that travels further and lasts less. Fewer independent growers at farmer’s markets. Entire regions losing their growing identity. National food security becoming a campaign promise instead of a reality. And when the climate throws something serious at us, drought, flood, global supply shock, we’ll realise how little resilience we’ve preserved. So what do we do? We start by telling the truth. Australia is not food secure. Not if 1 in 3 growers are planning to exit. The market isn’t working. Not when prices rise at the shelf and fall at the farmgate. The solution isn’t scale. It’s fairness, visibility, and rebalancing power. That means: Mandating cost-reflective contracts between retailers and suppliers Enabling collective bargaining rights for growers Building transparent data systems linking production costs to consumer prices Introducing transition finance for smaller producers navigating reform and climate pressure And holding supermarkets publicly accountable for margin extraction But more than anything, it means recognising what we’re losing, before it's gone. Final word If you ate a vegetable today, it likely came from someone who’s considered giving up in the past year. Not because they don’t care. But because caring doesn’t pay. This isn’t about nostalgia. It’s about sovereignty, over what we eat, how we grow it, and who gets to stay in the system.  Because the next time you see rows of green stretching to the horizon, you might want to ask: How many of these fields are already planning their last harvest?
By John Elliott June 20, 2025
If you're leading an FMCG or food manufacturing business right now, you're probably still talking about growth. Your board might be chasing headcount approvals. Your marketing team’s pitching a new brand campaign. Your category team’s assuming spend will bounce. But your customer? They’ve already moved on. Quietly. Like they always do. The illusion of resilience FMCG has always felt protected, “essential” by nature. People still eat, wash, shop. It’s easy to assume downturns pass around us, not through us. But this isn’t 2020. Recessions in 2025 won’t look like lockdowns. They’ll look like volume drops that no promo can fix. Shrinking margins on products that no longer carry their premium. Quiet shelf deletions you weren’t warned about. The data’s already there. According to the Australian Bureau of Statistics, consumer spending is slowing in real terms , even as inflation eases. The Reserve Bank confirmed in May: household consumption remains subdued amid weak real income growth . And over 80% of Australians have cut back on discretionary food spending , according to Finder. They’re still shopping, just not like they used to. A managing director at a national food manufacturer told me recently: “We won a new product listing in April. By July, it was marked for deletion. The velocity wasn’t there, but neither was the shopper. We’d forecasted like 2022 never ended. Rookie mistake.” That one stuck with me. Because I’ve heard it before, just in different words.