Managing Risk is Job #1 for Boards

Corporate boards of directors have their plates very full these days with mounting financial pressures and, as a result, it is becoming painfully obvious that having a solid understanding of risk management is critical.  A recent article in Corporate Board Member magazine highlights the role of the board as it relates to effective risk management.

In the view of most directors, risk is the responsibility of the full board and the crux of the job. That’s why it is essential that the board become comfortable with the way management perceives and deals with risk in the company’s operations. Management needs a company-wide process for uncovering risk, usually some kind of enterprise-risk-management system that aggregates all the known risks the company faces—from access to capital to talent retention to viruses in the software—and prioritizes them according to the magnitude of their potential effects on the company and the probability of their occurrence. Then it is the board’s role to define the 10 or 20 most important risks, making them regular agenda items and part of every discussion of strategy.

Wheelhouse Advisors can assist management or boards of directors in developing a cost-effective enterprise risk management framework that will facilitate a better understanding of how risks are being managed throughout the company.  Visit www.WheelhouseAdvisors.com to learn more.