The Board of Directors and Audit Committee Guide to Fiduciary Responsibilities

CHAPTER EIGHT

Address Risk Proactively

MUCH OF THE FINANCIAL CRISIS of 2008 has been blamed on uncontained risk. Risk management has since emerged as a top priority for many stakeholder groups looking to hold those in governance accountable to proactively address risk. The audit committee, with its heightened awareness of fraud risk, plays a central role in risk management, even for those organizations that have impaneled a specific risk committee. In fact, the NYSE stated in 2004 that “while it is the job of the CEO and senior management to assess and manage the company’s exposure to risk, the audit committee must discuss guidelines and policies to govern the process by which this is handled.”¹

This chapter tackles the essential topic of which ...