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.
PwC’s 2016 Annual Corporate Directors Survey
Despite the many disruptions and changes companies are facing today, directors are confident in their board’s ability to oversee risk. But directors recognize that new risks develop almost every day, and they know they can’t oversee all risks.