The Handbook of Board Governance, 2nd Edition

32Risk Governance: Leading Practice and Demographic Impacts

Ingrid Robinson MFAC BCOMM CPA CIA CRMA

Director Thought Leadership, Canadian Public Accountability Board, Board Director at Charitable Impact Foundation (Canada), Former Principal and Managing Director, Enterprise Risk Management, BGIS Global Integrated Solutions

Introduction

The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus find nothing could have been done. If we accept this notion, it will happen again.

—Financial Crisis Inquiry Commission

As disconcerted stakeholders questioned what the board was doing to govern risk when Lehman Brothers ignited the seminal event of the 2008/2009 global financial crisis, effective risk governance was the rally cry that echoed throughout the globe. With the perception that reckless risk taking underpinned the economic turmoil, the spotlight turned on board oversight of Enterprise Risk Management (ERM).

It has been a decade since the onset of the global financial crisis. Have directors learned how to more effectively govern risk? What does effective risk governance require? How does board demographics (such as gender and professional experience) influence effective risk governance in practice?

This chapter will explore these questions, unpacking leading practices with a roadmap to effective risk governance that all firms, not-for-profit, crown, public, and private can aspire to.

What Is Enterprise Risk Management and Risk Governance? ...