Risk, Governance, and Corporate Performance: A Board’s-Eye View

Enterprise risk management (ERM) is a central tool for making effective decisions and maximizing strategic opportunities. However, little is known about the way boards tackle their organizations’ need for effective corporate governance and risk management. Do they go with their “gut feeling”? How do they ensure that their approach meshes with management’s? How do they ensure ERM delivers a wake-up call?

The Conference Board of Canada recently interviewed 16 informed directors at successful publicly held and public sector corporations for their insights on marrying good governance, effective risk management, and strategic planning. This briefing summarizes directors’ observations and concerns. Most of the directors see strategic risk management as an integral element of good governance that builds a board’s healthy risk appetite. They also pointed to the challenges boards face as they structure themselves to deal with risk issues under the governance umbrella.