Corporate Governance Risk Management and Corporate Governance

This sixth peer review of the OECD Principles of Corporate Governance analyses the corporate governance framework and practices relating to corporate risk management, in the private sector and in state-owned enterprises. The review covers 26 jurisdictions and is based on a general survey of all participating jurisdictions in December 2012, as well as an in-depth review of corporate risk management in Norway, Singapore and Switzerland.

The report finds that while risk-taking is a fundamental driving force in business and entrepreneurship, the cost of risk management failures is often underestimated, both externally and internally, including the cost in terms of management time needed to rectify the situation. The reports thus concludes that corporate governance should ensure that risks are understood, managed, and, when appropriate, communicated.

Table of Content :

Foreword 3
Executive Summary 7
Chapter 1. Risk management governance framework and practices in 27 jurisdictions 9
-Background to the review 10
-Scope of the review 10
-The Perspective of the OECD Principles and Guidelines 11
-Corporate governance and the financial crisis 12
-Risk management practices in listed companies 13
-Risk management practices in state-owned enterprises 20
-Bibliography 27
Chapter 2. Norway: The corporate governance framework and practices relating to risk management 31
-Inroduction 32
-Risk management standards and codes 33
-The role of Norwegian boards of directors and board-level committees 37
-Risk management policies and structures in Norwegian companies 38
-External assessments of the risk management framework 42
-Conclusions 45
-Bibliography 47
Chapter 3. Singapore: The corporate governance framework and practices relating to risk management 49
-Introduction 50
-Risk management standards and codes 51
-The role of the board of directors 53
-Structure and organisation of the risk management system 56
-Risk management policies 59
-Independent assessment of the risk governance framework 61
-The role of shareholders
-Conclusions 64
-Bibliography 68
Chapter 4. Switzerland: The corporate governance framework and practices relating to risk management 71
-Introduction 72
-Risk management standards and codes  74
-The role of Swiss boards of directors 75
-Risk management policies and structures in Swiss companies 78
-External assessments of the risk management framework 80
-Conclusions 83
-Bibliography 85
Annex A. Financial Stability Board: Sound Risk Governance Principles (2013) 87