Risk-Proof Your Board: The Australian Playbook for a Volatile Decade
How Charities and Not-for-Profits Hold Communities Together, And Why Proper Funding Matters
Every suburb and town relies on a network of charities and not-for-profits. These NFPs keep families housed, feed people in crisis, support older Australians, include people with disability, and run outreach for young people who have fallen through the cracks. Government funds a large share of the work and sets the standards. Yet demand outstrips public budgets, program rules lag behind real life, and thin margins leave services exposed to shocks.
The national charity dataset confirms the scale. Total charity income is in the hundreds of billions of dollars a year. Roughly half comes from the government through grants and service contracts. The rest comes from donations, philanthropy and earned income. That pattern tells a simple truth. Public money is essential; however, community organisations raise and earn a similar amount to meet local needs.
What public grants pay for, and why the job is bigger than the budget
Government grants and purchase-of-service contracts fund regulated programs in aged care, disability, health, child protection and housing. The states and territories invest billions each year in housing and homelessness. They do the same in child protection and allied services. Commonwealth programs also purchase large volumes of care. This funding is significant, and it is vital to stability.
It is also incomplete. Program prices do not always keep pace with wage awards, insurance, transport, rents and compliance. Grants often fund outputs on paper but underprice the hours required to do the work safely. NFPs cover the shortfall with philanthropy, donations and trading income. They do it because the need is local and immediate. The result is a constant balancing act between rosters, waiting lists and the practical costs of service delivery.
What Board Risk Preparedness Means in Practice
Board risk preparedness is a disciplined approach to identifying, sizing, and shaping responses to high-impact risks. It is broader than a risk register. It blends scenario planning, leading indicators, capital buffers, and rapid decision rights. It anchors risk appetite to strategy. It also improves the flow of information to directors.
For large enterprises, this lives in the board calendar and committee work. For mid-market firms and fast-growing SMEs, an advisory board can drive the same focus. You may not have a chief risk officer. You can still achieve board risk preparedness through clear roles, short cycles, and outside expertise.
The Predictable Surprises Boards Must Prioritise
High-consequence, low-likelihood events cause the most serious damage. They also give little time to react. Effective boards hunt for predictable surprises. These are events that would strike at your core value proposition. Use a simple grid to rank risks by scope and certainty. Pick the few scenarios that deserve board time each quarter.
Typical Australian predictable surprises include the following.
- Severe-weather events and infrastructure outages that halt production or logistics. Insured catastrophe losses reached billions in recent seasons. Board risk preparedness must consider physical sites, people, and suppliers.
- Credential-phishing and data breaches that disrupt operations and erode trust. The ASD and AICD joint publication on cybersecurity priorities for 2025 to 2026 highlights phishing and credential compromise as dominant entry points. Board-level cyber preparedness requires playbooks, drills, and vendor controls.
- Fraud and scams that drain cash and hijack channels. The National Anti-Scam Centre reports that attackers continue to target small business processes and brand trust. Board risk preparedness should harden approvals and educate teams.
- Monetary policy shifts that stress cash and covenant headroom. The RBA raised the cash rate to 3.85 per cent in February 2026, with market pricing suggesting further increases are likely. Strong board risk preparedness builds buffers and pre-arranged options.
Australia’s Risk Backdrop in 2026
Australia’s economic outlook has shifted. The RBA raised interest rates in February 2026, citing stronger private demand and inflation that was materially higher than forecast. Underlying inflation is expected to remain above three per cent until well into 2026, with headline inflation projected to peak at 4.2 per cent around mid-year.
This is a different environment from the rate-cutting cycle that began in early 2025. Directors should expect persistent cost pressure, uneven demand across sectors, labour market rebalancing, and weather-driven disruptions to keep risk elevated. NAB business survey data shows confidence dipping following the February rate decision.
With 2.7 million actively trading businesses in Australia and an exit rate of 13.9 per cent in 2024 to 2025, the operating environment rewards vigilance. Business-related personal insolvencies rose approximately 38 per cent year on year in late 2025. This is a classic setting for surprise shocks and rapid pivots. Board risk preparedness is a practical edge, not a theoretical exercise. If navigating these economic conditions feels challenging, our finance consulting team helps businesses strengthen cash discipline and financial resilience.
A 90-Day Board Risk Preparedness Sprint
You can lift board-level readiness in three short cycles. Keep meetings short. Keep decisions concrete.
Weeks 1 to 4: Define the risk frame
- Confirm strategy anchors and risk appetite in plain language
- Pick four predictable surprise scenarios to explore
- Agree on impact thresholds that would force action
- Assign owners for each scenario and define decision rights
This sets a common language for board risk preparedness and avoids drift.
Weeks 5 to 8: Pressure-test the operating model
- Run two premortems. Imagine a failed quarter. Work back to root causes.
- Map single points of failure across people, sites, systems, and suppliers
- Test liquidity headroom under each scenario, including covenant and insurance checks
- Identify no-regret moves that cut exposure without heavy spend
This makes board risk preparedness tangible. It links scenarios to real constraints.
Weeks 9 to 12: Lock triggers and playbooks
- Set leading indicators and traffic-light triggers for each scenario
- Build two decision trees: one for cyber extortion, one for site disruption
- Pre-draft stakeholder messages for employees, customers, and lenders
- Schedule a 90-minute simulation with the whole leadership team
Clear triggers and rehearsals shorten time to action. That is the heart of board risk preparedness.
Scenario Planning That Boards Actually Use
Boards often request scenarios but never act on them. Keep them simple and comparable. Use four cases with forced choices. Include one outlier case to stretch thinking. Ask what would make your strategy fail. Then identify the few moves that work across all cases. That is your resilience core.
This approach builds shared mental models and creates alignment for rapid decisions. Australian directors can draw on guidance from the Australian Institute of Company Directors, which links scenarios to risk appetite and culture. Our consulting services include facilitating scenario planning workshops tailored to your board’s needs.
Funding Resilience Without Starving Growth
Resilience is not just insurance. It is the capacity to keep investing when others pull back. Treat it as a portfolio of options.
- Liquidity buffers: Pre-arranged facilities and cash policies buy decision time
- Insurance optimisation: Model cash outcomes with and without cover. Rebalance limits to match peak exposures, including severe-weather risks.
- Supplier diversification: Dual-source critical inputs and qualify alternates now
- Technology hardening: Multi-factor authentication, privileged access control, and tested backups lower the impact of a breach. The AICD Cyber Security Governance Principles Version 2 provides practical checklists for boards of all sizes.
- People resilience: Cross-train critical roles. Build simple standard operating procedures that new hires can use on day one.
Directors should view these choices as real options. Each small premium preserves a big future choice. This is smart board risk preparedness. Our operational excellence consulting helps businesses identify and implement no-regret resilience moves.
Make Board Information Action-Ready
Many boards are drowned in thick papers. Important signals get lost. Fixing how information is written and presented is a high-return move. Use plain language. Limit sentences to 15 to 20 words. Keep paragraphs short. Highlight decisions and risks early.
These practices raise comprehension, speed, and inclusion. They also improve the audit trail of decisions. Australian directors should embed an accessible writing standard into all board packs. Make content relevant, findable, understandable, and usable. Structure for scanning with an inverted-pyramid layout. Avoid jargon. Use active voice. Replace long dashes with commas or full stops. Our professional writing services help boards and leadership teams communicate with clarity and purpose.
A fast board-paper template
- Purpose: one sentence
- Decision required: one bullet list with options and a recommendation
- Risk and controls summary: one short paragraph
- Leading indicators and triggers: one short table
- Scenario impact: two or three bullets per scenario
- Next steps: owner and deadline
Keep appendices for details. This format helps directors grasp trade-offs quickly and creates a consistent record that improves accountability.
Culture, Cadence, and the Human Side of Risk
A strong risk framework fails without the right culture. Encourage early signal-raising. Reward prevention, not just heroics after a crisis hits. Schedule short, regular review slots so risk never disappears from the agenda.
Rotate in outside voices to challenge assumptions. These habits are inexpensive yet powerful. They anchor board risk preparedness in daily behaviour rather than annual events.
After any event, run a short post-mortem. Capture what worked, what failed, and what to change. Use the session to check whether the board has the right mix of skills for the next cycle. Treat this as part of board risk preparedness, not a once-off review. Our learning and development consulting builds leadership capability in risk awareness and decision quality.
Board Risk Preparedness for Enterprises of Every Size
Large and listed enterprises
- Run quarterly scenario sessions with a cross-functional team
- Maintain a live risk dashboard with leading indicators and triggers
- Align capital allocation to resilience options and strategic bets
- Commission an independent cyber and insurance review each year
Mid-market firms
- Use an advisory board to concentrate expertise
- Map single points of failure in sites, systems, and suppliers
- Pre-agree crisis decision rights between owners, CEO, and advisors
- Share a one-page resilience plan with key lenders and insurers
Small businesses and startups
- Keep it simple. Complete a one-evening premortem and a one-page plan. Our Actually Supported coaching program integrates risk awareness into your monthly review rhythm.
- Turn on multi-factor authentication, back up data, and enforce payment controls
- Build a basic cash buffer and a second supplier for critical inputs
- Ask your accountant and broker to double-check insurance and liquidity
In every case, board risk preparedness means fewer surprises and faster recovery. It also makes your business more attractive to employees, customers, and financiers.
Premortems and Drills: Low-Cost Force Multipliers
A premortem asks a simple question. It is three months from now, and we failed. Why? Teams then list causes and early signs. Boards learn where to invest and where to simplify.
Pair premortems with short drills. Run a cyber tabletop for 60 minutes. Or simulate a warehouse outage. The point is practice under mild pressure. That builds muscle memory and confidence. This habit is central to board risk preparedness in Australia’s volatile setting.
Leading Indicators That Matter
Good indicators give you a week or a month of extra time. They turn a scramble into a plan. Start small.
- Operational: Supplier on-time-in-full, key site absenteeism, and backlog age
- Financial: Daily cash balance, undrawn facilities, debtor stretch
- Cyber: Phishing test failure rates, privileged access changes, and patch age
- Customer: High-value churn intent, complaint spikes, and NPS drops
- External: Severe-weather alerts near sites, scam alerts in your industry, monetary policy statements that affect rates or credit
Publish thresholds and actions. When an indicator flashes, you act. That discipline sits at the core of board risk preparedness.
The Cyber Extortion Decision Tree
Every board needs a pre-agreed approach to cyber extortion. Emotions run high during an event. Decisions stall. A simple tree avoids paralysis.
- Is safety at risk or critical care affected?
- Can you restore safely from clean backups within the agreed time?
- Has data been exfiltrated?
- What law enforcement steps are required?
- What legal and regulatory reporting triggers apply?
- What pre-set criteria must be met before any payment is considered?
This tool does not answer every case. It sets the floor for action and ethics. It is an essential element within board risk preparedness. The ASD and AICD cybersecurity priorities for boards of directors publication provides further governance questions for the 2025 to 2026 threat environment.
Supply Chain Stress: A Practical Checklist
- Map tier-one suppliers and the few tier-two dependencies that genuinely matter
- Identify alternates and test small orders
- Validate insurance for supplier failure and transit events
- Pre-negotiate temporary logistics workarounds
- Align safety stock to realistic lead times, not hope
Severe-weather seasons and transport disruptions will remain part of Australian business life. Board risk preparedness treats logistics as a strategic asset, not a back-office cost.
How to Measure Progress in Board Risk Preparedness
Lagging measures
- Days to reopen after a site outage
- Time from incident to customer notification
- Cost to restore operations as a percentage of quarterly operating expenditure
Leading measures
- Percentage of board papers using the standard template
- Number of premortems and drills completed in the last quarter
- Coverage ratio of critical single points of failure addressed
- Response-time adherence to indicator triggers
Report these signals each quarter. Tie them to incentives. Your goal is steady improvement and faster action.
Common Traps That Weaken Board Risk Preparedness
- Over-indexing on likelihood and underweighting consequence. Treat existential risks as if they could happen tomorrow.
- Too many scenarios, creating noise and no decisions
- Thick board packs that bury the decision and the risk
- A hero culture that praises late saves but ignores early warnings
- No post-mortems, which repeat mistakes and miss skill gaps
A Simple Year-Round Cadence
- Quarter 1: Choose scenarios and run two premortems
- Quarter 2: Simulate cyber and severe weather responses
- Quarter 3: Review insurance, liquidity, and supplier alternatives
- Quarter 4: Run a whole-of-business drill and a board post-mortem
This rhythm keeps the organisation calm and ready. It institutionalises board risk preparedness rather than treating it as a once-off project.
Communicate Risk So People Can Act
Crisis messages should be short, human, and specific. Tell people what happened, what you are doing, and what you want them to do. Avoid jargon. Avoid long paragraphs. Use plain language and clear layouts in staff notes, customer updates, and lender briefings.
Readability is operational. It removes delay and error when minutes matter. These communication standards belong inside every board risk preparedness playbook.
The Payoff: Faster Recovery and Better Growth
Prepared firms reopen sooner after a flood, restore systems more quickly after a breach, and keep investing while others pause. They deliver on promises and retain talent. Lenders trust them. Customers stay. The market notices.
That is why board risk preparedness is a strategy lever, not a cost centre. Australia’s economy rewards firms that can operate through disruption. Rates move, weather shifts, and scams evolve. The board that prepares today will make better calls tomorrow. That is the edge you can control.
Your Next Step
If you want a practical partner to structure and accelerate your board risk preparedness, we can help. SBAAS brings over two decades of experience in governance, risk management, and crisis leadership. Our Managing Director has sat on boards, led through crises, and advised the government on enterprise resilience.
Book a conversation today to discuss your needs. Or learn more about SBAAS and our approach to see how we help Australian businesses build the governance, systems, and capability that protect value and accelerate growth.
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Sources
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Australian Small Business and Family Enterprise Ombudsman. Number of Small Businesses in Australia, Small Business Data Portal. https://www.asbfeo.gov.au/small-business-data-portal/number-small-businesses-australia
Insurance Council of Australia. Insurance Catastrophe Resilience Report 2023 to 2024. https://insurancecouncil.com.au/resource/catastropheresiliencereport23-24/
Australian Competition and Consumer Commission. Targeting Scams: Report of the National Anti-Scam Centre on Scams Data and Activity 2024. https://www.accc.gov.au/about-us/publications/serial-publications/targeting-scams-reports-on-scams-activity/targeting-scams-report-of-the-national-anti-scam-centre-on-scams-data-and-activity-2024
Office of the Australian Information Commissioner. Notifiable Data Breaches Report, January to June 2024. https://www.oaic.gov.au/privacy/notifiable-data-breaches/notifiable-data-breaches-publications/notifiable-data-breaches-report-january-to-june-2024
Reserve Bank of Australia. Statement on Monetary Policy, February 2026. https://www.rba.gov.au/publications/smp/2026/feb/outlook.html
Reserve Bank of Australia. Plumb, M. Recent Developments in Inflation and the Economic Outlook, ABE Annual Forecasting Conference, February 2026. https://www.rba.gov.au/speeches/2026/sp-so-2026-02-24.html
NAB. Monthly Business Survey. https://business.nab.com.au/tag/business-survey/
Australian Bureau of Statistics. Counts of Australian Businesses, Including Entries and Exits, July 2021 to June 2025. https://www.abs.gov.au/statistics/economy/business-indicators/counts-australian-businesses-including-entries-and-exits/latest-release
Australian Financial Security Authority. State of the Personal Insolvency System 2024 to 2025. https://www.afsa.gov.au/news/state-pi-report-highlights-modest-increase-personal-insolvencies-sole-traders-small-business-and-construction-most-risk
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Eric Allgood is the Managing Director of SBAAS and brings over two decades of experience in corporate guidance, with a focus on governance and risk, crisis management, industrial relations, and sustainability.
He founded SBAAS in 2019 to extend his corporate strategies to small businesses, quickly becoming a vital support. His background in IR, governance and risk management, combined with his crisis management skills, has enabled businesses to navigate challenges effectively.
Eric’s commitment to sustainability shapes his approach to fostering inclusive and ethical practices within organisations. His strategic acumen and dedication to sustainable growth have positioned SBAAS as a leader in supporting small businesses through integrity and resilience.
Qualifications:
- Master of Business Law
- MBA (USA)
- Graduate Certificate of Business Administration
- Graduate Certificate of Training and Development
- Diploma of Psychology (University of Warwickshire)
- Bachelor of Applied Management
Memberships:
- Small Business Association of Australia –
International Think Tank Member and Sponsor - Australian Institute of Company Directors – MAICD
- Institute of Community Directors Australia – ICDA
- Australian Human Resource Institute – CAHRI
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