A person, group, or entity responsible for overseeing an organization’s risk management framework and providing strategic direction on risk-related decisions, often involving setting risk appetite and monitoring identified risks. These individuals or bodies, such as a governing board, are accountable for establishing policies and processes to identify, evaluate, monitor, and manage risks to achieve strategic objectives while maintaining a positive risk culture.
Responsibilities
- Accountable Authority: The ultimate authority for ensuring that adequate systems for risk management and oversight are in place.
- Strategic Direction: provide the overall vision and strategic direction for managing risk within the organization, setting the tone from the top.
- Risk Appetite: a crucial responsibility is to agree upon and set the organization’s risk appetite: the level of risk it is willing to accept in pursuit of its objectives.
- Oversight and Assurance: oversees the executive team’s risk management activities, seeking assurance that risks are identified and effectively managed.
- Framework and Policies: responsible for approving and maintaining the overall risk management framework and related policies.
- Culture: plays a vital role in cultivating a positive risk culture throughout the organization.
In essence: ensures that risk management is not just a task but a fundamental part of the organization’s governance, enabling informed decision-making in pursuit of its goals.
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