May 10, 2010

Ten Risk Oversight Principles

Board Perspectives: Risk Oversight, Issue 7

In October 2009, the National Association of Corporate Directors (NACD) published its Report of the NACD Blue Ribbon Commission – Risk Governance: Balancing Risk and Reward. This report recommends ten principles to assist boards in strengthening their oversight of the company’s risk management. According to the report, “the Commission believes that [the ten] principles provide a foundation that boards can use to build a more comprehensive risk oversight system tailored to the specific needs of their respective companies.” We agree. Offered as guidance to directors, these principles provide a context for understanding the risk oversight process.