Governance Update: Liability Risk for Boards Increasing

by Ken Urish 14. September 2011 13:20
In a plus for corporate governance advocates and a rare positive emerging from the current economic climate, the financial crisis appears to have driven home the need for boards to manage risk more effectively. This conclusion is based on the findings of a survey of board members of public companies with revenues ranging to $750M that was released this month by our alliance partner BDO. As the responsibility of boards has grown in recent years due to regulatory requirements, board risk management activities have been focused heavily on compliance. Now, facing increased risks as a result of the financial crisis, it appears that boards are more willing to take a proactive role in risk management. In the survey, when asked what topics they would like to spend more time on, a majority (55%) of board members at public companies cite risk management, more than any other area. Moreover, an even greater percentage (61%) believe their liability risk as a director has increased during the past few years. Interestingly, the study shows that the CEO position is considered by board members to be the most helpful position for assessing and managing risk (44%), with the CFO following at 33%. 
Categories: Assurance