The National Association of Corporate Directors reported in its Public Company Governance Survey taken in 2008 that "if the current economic downturn has taught us anything, it is that our processes for risk oversight need improvement."
The survey reported that while 67 percent of companies assign the majority of risk-related tasks directly to an already burdened audit committee, "many issues lie outside the audit committee and require other committees–if not the full board–to oversee."
The NACD also said that in a recent member poll, a large majority (76 percent) of directors indicated that management provides the board with the information necessary to effectively execute its risk governance role.
Those same directors, however, also said that two of the top challenges in providing risk oversight are:
? Management's capacity to define and explain the organization's risk management structure and processes.
? The organization's capacity to identify and assess risks–two challenges that fall squarely on management's shoulders, but directors can help by improving their own oversight processes.
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