The risk governance – An evolutive concept
In our last article, we talked about the risk culture. We insisted that the tone was coming from the top and was mostly an attitude driven process. However, even if the attitude exists, formalizing the risk management cannot hurt. And that is when governance comes into play.
This governance needs to evolve with the company. It sounds logical that a startup might have, as only risk governance, a recurring agenda topic in the management team meeting. When you come to a multi-location, multi-product company, a risk committee with operational subgroups in the various organizational dimensions might be of order. To ensure that it covers all these dimensions, a risk committee can last a day.
As governance also drives the various processes around the risk management, the evolutive aspect of such process will follow the same trend. The range will go from a simple discussion to a full risk management manual covering each and every single process of the company.
The risk here is to not have any governance at all. Why? Simply because the systematism of risk management disappears. This systematic approach to risk is what reduces the probability to deviate from the set objectives. The systematic approach is also the opportunity to show the tone at the top and set the scale as to how important risk is in the company.
In our next article, we’ll discuss briefly how to check this culture and your governance is in place.
Co-Founder & Partner
My experience as CFO and CRO, Board Member in financial services, banking and insurance, allows me to cover a wide range of topics: general management of entities, Risk and finance management, corporate taxes, supervision of IT and operations, accounting, budgeting, creation and restructuring of legal structures, regulatory reporting, acquisition of companies, operational statistics, and management accounting.
My strengths are in Finance and Risk Management