Is Your Board Asking the Really Tough Questions about Risk?
Senior management has borne the brunt of criticism in recent memory in high-profile cases involving risk management and internal control failures. While management failures often are at the root cause of losses, penalties and reputational damage, boards of directors are increasingly being cited for significant risk governance failures. Substantial investments have been made in risk […]
Mark Sexton is a Senior Managing Director and Paul Feldman is a Senior Director at FTI Consulting. This post is based on their FTI Consulting memorandum.
Senior management has borne the brunt of criticism in recent memory in high-profile cases involving risk management and internal control failures. While management failures often are at the root cause of losses, penalties and reputational damage, boards of directors are increasingly being cited for significant risk governance failures. Substantial investments have been made in risk functions, including standing up dedicated risk committees (“RiskCos”), developing risk appetite statements, improving reporting and requiring board members to undergo mandatory risk-specific training. The financial services sector has long been a leader in this area, but comparable practices are emerging in other industries.
