Five questions on corporate governance and risk
Corporate governance was more straightforward back in the day when roles were defined simply as “management acts, the board oversees.” But today, that approach may not hold up — not when boards are scrutinized from all sides by regulators, shareholders, the media, and analysts, to name a few. So what’s the primary role of the board of directors today? Is it to simply oversee executive management’s activities? Or should the board take an active role as strategic partners, working alongside management to deal with the enterprise’s toughest problems? And what’s the board’s role as it relates to risk and culture? There are no “one size fits all” answers, but it’s important that the board and executive management agree on how they will work together to build a Risk Intelligent organization.
In this Risk Angle, Nicole Sandford, partner, Deloitte & Touche LLP, offers her thoughts on some questions commonly asked about the role of the board. Then, Eric Pillmore, senior advisor, Deloitte LLP’s Center for Corporate Governance, adds his perspective from the front line as a former senior VP of corporate governance for a large multinational enterprise.
This Risk Angle answers the following questions
- What’s the board’s role in corporate governance — and how does that differ from management’s role?
- Why should boards change their approach now?
- How does the board's rolein oversight of risks factor in?
- How can the board influence the corporate risk culture?
- How can companies evaluate the board's effectiveness?
It also takes a closer look at framing the future of corporate governance.