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Company boards are closely connected to effective risk management. Risk assessment, reporting and control help to enhance a board’s governance and control policies, keeping organisations aligned with their objectives.
ACCA’s research highlights the key challenges boards face when performing their roles, but also shines a light on current good practices across both smaller and larger organisations.
Key findings from the report include the following:
• Some organisations are increasingly aware of the strategic benefits of risk management, which helps them to exploit opportunities and exceed their objectives;
• Diversity enables boards to expand their skills and experience in risk; thus making them more effective collectively;
• Boards find it hard to understand and address risk culture within an organisation, due to a lack of guidance and difficulty in connecting culture to organisational performance;
• Time constraints at board meetings and overly detailed risk reports can distract boards from looking at the bigger strategic picture.
Jo Iwasaki, ACCA’s head of corporate governance, says:
‘It is so important for the research to shed light on existing practices. It helps us find out how effective current measures are in raising the awareness and quality of board engagement in risk management. We can then highlight emerging good practice to promote improvement at every level.
‘This helps us have informed conversations with people in practice, but also those who are in the position to set the framework for good risk management.’