The Role of the Board in organisational Risk Management
The Risk Management policy setting and oversight role of the Board has been widely recognised and is now effectively prescribed.
The ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd Edition, which became effective for all ASX listed entities for reporting periods commencing on or after 1 January 2014, now places the responsibility for the entity’s Risk Management oversight and monitoring clearly with the Board of Directors. Effective Risk Management is an essential element of effective corporate governance
The Australian Standards for corporate governance also place the responsibility for identification, assessment and management of risk uniquely with the board¹.
Risk Management and the Governance Professional
Commensurate with the responsibilities of the Board for the entity’s Risk Management has been the rise of the Governance Professional’s role in Risk Management. In the “Benchmarking Governance Practice in Australia” study by Chartered Secretaries Australia (now the Governance Institute of Australia), the survey found a significant rise in the involvement in the entity’s risk management oversight of the Company Secretary, “… due to a growing recognition that risk management is a crucial part of corporate governance, the number of Company Secretaries providing support for the risk committee has risen sharply from 18 per cent in 2003 to almost half (44 per cent) in 2005.”
In fact, according to CSA Chief Executive, Mr Tim Sheehy, “in order to focus on the job of governance and risk, they (Company Secretaries) have been shedding other roles.”
Peter Wetzig has considerable experience and skills in developing Australian Standards-compliant Risk Management protocols and methodologies to ensure the Board discharges its duties in this vital area of governance and that the Board views and priorities for Risk Management are appreciated and embraced by management.
¹ AS 8000– 2003 Good Governance Principles Section 18.104.22.168 (d) “The Board should ensure that the risks facing the entity have been identified, assessed and that the risks are being properly managed.”