For executives dealing with non-financial risk, a three-minute read could save you from 300 pages of boardroom boredom.

In a recent presentation, ASIC Chair James Shipton discussed some issues that boards face when addressing non-financial risk.

One of the more significant issues he raised was the length of reports and how they were simply too voluminous for a risk committee to deal with. He pointed to the average length of a risk report being about 300 pages.

Instead of sifting through reems of data, calculating risk indices or getting bogged down in risk-reward arguments: simply measure, report and act on Trust. Awareness of a risk and its magnitude will impact the degree of trust people have in an organisation.

This trust is measurable among the relevant stakeholders, be they customers, employees, suppliers, lenders or investors.

A trust audit and report will be far easier to work through and will point to how to deal with risks.

Here are two examples:

One type of risk is customer flight. While traditional market and customer research identifies when customers know there is a better offer, this is far too late. These customers could already be on their way to a competitor. A trust audit can provide early warning signals of the magnitude of this risk. In addition to asking customers, by asking employees and suppliers whether they trust that your company is providing goods and services that do what they should, at a fair price, and will be here in the future, then a leader can be more confident that customers are getting what they need.

Another type of risk is employee flight. Existing engagement surveys are useful to identify whether people are thinking of leaving, but not great at indicating why. By conducting a trust audit and understanding the degree to which an employee trusts an employer to act in their best interests, pay fairly, and provide development opportunities, a leader will better understand why people are thinking of leaving and what to do about it.

For executives who want a risk report to be something they can use, a well-managed trust audit could save a great deal of time, money and boardroom boredom.