Increasingly, stakeholders are advising corporate board members to have more oversight of how senior executive management executes enterprise-wide risk management. Stakeholders want a better understanding of how companies understand emerging risks, manage known risks with limited mitigation capital, and how risk management activities integrate with other functional activities.
Many boards are aware that the confidential, ad hoc, intuitive decision-making of the past must give way to more formalized processes that can respond to a more transparent environment.
Boards’ responses to the pressure are fragmented. There is no consistency among peer groups, but market leaders are showing a more favorable response.