Balancing Risk and Reward

In the wake of the financial and economic crisis that we have all faced, organizations must fundamentally re-consider risk and strategy as they navigate what may be the most challenging business environment any generation of directors has ever known. Management teams and Boards will need to collaborate on these efforts to ensure the company provides transparent, accurate and consistent disclosure to shareholders.

This is according to the National Association of Corporate Directors’ (NACD) Blue Ribbon Commission report titled, Risk Governance: Balancing Risk and Reward, which provides a blueprint to improve risk governance and oversight.

Prepared with the assistance of Oliver Wyman and drawing on the findings of an Oliver Wyman/ NACD survey, the report sets out ten principles and associated recommendations to improve directors’ risk oversight capabilities. The recommendations are a clear call for Boards to revise risk governance and underscores the need to pay increased attention to explicitly considering risk in strategic decision making, defining the corporate risk appetite, and risk analytics and reporting.

To download an executive summary of the report, click on the link below.