corporate governance & risk governance

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The need is now to bring corporate governance issues closer to centre stage. Better financial regulation has much to accomplish, but cannot alone satisfactorily assure performance of the major banks at the heart of the free market economy. These entities must also be better governed.

Sir David Walker, 2009

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Regardless of the sector in which firms (or public entities, for that matter) operate, expectations for effective governance are at an all-time high. This is especially true in relation to risk, as recent attention from the Walker Review (in financial services in the UK), the recent report of the US NACD Blue Ribbon Commission and the review by the UK Financial Reporting Council of the Corporate Governance Code all attest.

So why so much attention on risk and governance? The answers are complex and there are as many answers as there are firms (or other entities) in which the question is asked. But there are clear themes that emerge.

One cluster of these is around the role and performance of non-executive directors; another, board efficacy; and another the practicalities of understanding and managing risk across a complex organisation.

We work with boards of directors to improve board functioning and to assist boards to grapple with the challenge of contributing effectively through strong governance of risk. But there is a limit to what NEDs can do.

Many large firms have internal governance structures that create more problems than they solve. We assist firms to streamline their internal governance to support better 'line of sight' on risk.

FRC GOVERNANCE CODE

Revised Corporate Governance Code

A a sustained period of consultation, FRC has issued its revised Corporate Governance Code in June 2010.

SUBMISSION TO FRC

Strengthened boards' hands on risk

Our initial submission to the FRC on their consultation paper on revisions to the Corporate Governance Code, October 2009

GUIDANCE FROM NACD

Balancing risk & reward

Excellent guidance by US NACD on risk governance covering risk appetite and the role of directors on risk in the firm