Guiding Principles for Board Risk Committees

Excerpt from

As a member of the Board Risk Committee Governance Council, David X Martin contributed to developing this guidance document.

Board risk committees are of growing  importance in best practice corporate governance. We provide these Guiding Principles and the associated discussion to further the development of risk governance processes via board risk committees at organizations of all kinds. These Guiding Principles have also been written to give external stakeholders a view of what should be expected from the boards of
organizations on which they depend for their success.

Principle 1: At any organization, the full board has the overall responsibility for risk governance. In many cases, the full board will benefit from the focused and specialized support of a well structured and competent board risk committee.

Principle 2: The focus of a board risk committee is to link the risk-taking activities of an organization with its strategic objectives. It provides the full board with the capacity to evaluate the risk management infrastructure and capabilities of the organization and to challenge the
effectiveness of management’s pursuit of strategic objectives from a return-on-risk perspective.

Read the full report at