How your board can decide if it needs a risk committee

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To have or have not?

Ongoing global economic and political uncertainty continue to put a spotlight on whether companies are prepared to both seize opportunities that emerge and protect themselves against threats. For their part, boards are reflecting on whether they have the right governance structures to oversee strategic risks like these effectively. Some are examining whether it makes sense to establish a risk committee—an independent group of directors responsible for overseeing risk management policies and framework. Barring a regulatory requirement, deciding whether to have a separate risk committee is not an easy decision. 

Questions for the board to consider:

  • How is the board currently overseeing risk? Would a risk committee increase the board’s effectiveness?
  • Does the board need to reassure investors or regulators that it is devoting enough attention to risk—and would a risk committee be an effective way to do that?
  • How do the benefits of adding a risk committee compare with the drawbacks?
  • What are some considerations when setting up a risk committee?

Contact us

Paula Loop

Governance Insights Center Leader, PwC US

Sharad Jain

Partner, Governance Insights Center, PwC US

Deidre Schiela

Partner, Governance Insights Center, PwC US

Paul DeNicola

Principal, Governance Insights Center, PwC US

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