Managing Risk

The economic events of the past 18 months have dramatically changed companies' awareness of the nature and extent of business risk. Companies are now painfully aware that numbers don't tell the whole story. As a result, in July 2009, the US Securities and Exchange Commission (SEC) proposed for public companies new rules that would require disclosure of the board of directors' role in managing risk (citing credit risk, liquidity risk, and operational risk). Other proposals would require public companies to establish board-level risk management committees.