For years, corporate directors have been asked to raise the bar on risk oversight. Once considered the territory of internal auditors or general counsel, setting policies on the oversight of risk for the entire enterprise is now widely accepted as the purview and responsibility of the full board. If there is one lesson learned in recent years, it is that unknown or underestimated risks can bring a company to its knees.
The current economic situation and the scrutiny on board responsibility has brought risk analysis into razor-sharp focus. Directors, in fact, say the number one thing that keeps them up at night are “unknown risks” (Figure 7), and aside from profitability and shareholder value, they point to risk management as the primary area to which they should pay the most attention (Figure 8).
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