COSO
COSO - The Committee of Sponsoring Organisations of the Treadway Commission 
In 2009, following the global financial crisis, COSO* produced a report on The Effective Enterprise Risk Oversight – The Role of the Board of Directors.
Summary of Findings
- The role of the Board of directors in enterprise-wide risk oversight has become increasingly challenging as expectations for board engagement are at all time highs.
- The challenge facing Boards is how to effectively oversee the organisation’s enterprise-wide risk management in a way that balances managing risks while adding value to the organisation.
- An entity’s Board of directors plays a critical role in overseeing an enterprise-wide approach to risk management.
The four key areas highlighted that contribute to Board oversight with regard to enterprise risk management are:
- Understand the entity’s risk philosophy and concur with the entity’s risk appetite
- Know the extent to which management has established effective enterprise risk management of the organisation
- Review the entity’s portfolio of risk and consider it against the entity’s risk appetite
- Be apprised of the most significant risks and whether management is responding appropriately
While ERM is not a panacea for all the turmoil experienced in the markets in recent years, robust engagement by the Board in enterprise risk oversight strengthens an organisation’s resilience to significant risk exposures.
Download a full copy of the COSO Executive Summary here
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Good Governance: Great Performance
*COSO is a voluntary private sector organisation dedicated to guiding executive management and governance participants towards the establishment of more effective, efficient, and ethical business operations on a global basis. It sponsors and disseminates frameworks and guidance based on in-depth research, analysis, and best practices.
The COSO members are the American Accounting Association, Institute of Management Accountants, American Institute of Certified Public Accountants, The Institute of Internal Auditors, and Financial Executives International.
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