Key issues: Risk management

Risk management involves the identification, assessment, and prioritization of risks and the application of resources to minimize, control, and mitigate the impact of unfortunate events on a business. It is the job of a board to oversee that their management teams have adequate risk management policies and procedures in place. A major part of any risk oversight plan is determining a company’s risk appetite: the amount of risk an organization is willing to accept in pursuit of strategic objectives. When done right, it is a robust process that can help management and the board understand exposures and make appropriate risk-based strategic decisions.