Corporate Culture, Compliance, and Risk Management at the Board Level

The board’s risk oversight responsibility has become more complex and subject to enhanced scrutiny from courts, as well as demands from institutional investors for more meaningful disclosures. Although the day-to-day risk management belongs with management, the board must engage proactively in monitoring key corporate culture and other risk factors and working with executives on a strategy to mitigate risks. How can directors work most effectively with management to understand the company’s risk appetite, the nature of material risks, their potential impact on corporate strategy and performance, how they are being managed, and what kind of controls are in place for preventing or promptly detecting improper behavior? Corporate culture plays a critical role in reinforcing (or undermining) efforts to ensure adherence to legal and regulatory mandates and mitigate risks. How can a director determine if the company’s culture is “right” and if its compliance and risk management approach has been integrated into the corporate strategy and culture? This session will examine the ways that the board can most effectively carry out this oversight function in a world of increasingly complex and interconnected risks.