Pathway to Restoring Trust

The Committee for Economic Development recently issued a briefing on how companies can restore trust in corporate governance.  Well known business leaders participate on this committee and provide periodic guidance for companies based on current events.  A significant piece of this briefing focuses on how companies should be managing risks.  Here is an excerpt discussing the role of both the board of directors and management.

There should be a board entity—whether the Audit Committee or a new Risk Committee—which has the task of assessing the direct economic risks noted above (capital, leverage, liquidity, credit, market, operational) confronting the company. Working with management, it should review and agree upon the fundamental systems, processes and measures for assessing, mitigating and monitoring risk, as described immediately above. It should receive timely updates on the status of high risks facing the company. It should also receive reports from relevant risk officials in a company on whether those receiving compensation above a certain level have identified relevant risks and taken appropriate risk-mitigation steps. (This activity is relevant both to accountability and to compensation.)

Does your company operate in this manner?  If not and you are interested in learning how to build a program to support this activity, visit www.WheelhouseAdvisors.com.