In the aftermath of the worst recession since the Great Depression, one would think corporate boards would fully embrace enterprise risk management and a board risk oversight process. A new study has found differently, however.
A report by consulting and internal audit firm Protiviti and the Committee of Sponsoring Organizations of the Treadway Commission (COSO) entitled, "Board Risk Oversight-A Progress Report: Where Boards of Directors Currently Stand in Executing Their Risk Oversight Responsibilities," found that board members were divided regarding risk oversight. While 53% of participants rated the process in their organization as "effective" or "highly effective," more than 70% indicated that their boards are not formally executing mature and robust risk oversight processes.
"Risk oversight is a high priority on most boards of directors' agendas," said Jim DeLoach, a managing director with Protiviti. "Our survey findings provide valuable insights on how a board can advance to a more mature stage-a critical issue as new legislation and regulations force boards to rethink their structure and mission as it relates to risk oversight." Findings such as this make one question what, if not a severe recession, it will take for boards to realize the importance of risk oversight.