Monthly Archives: February 2017

Introduction

Overview

The year 2017 begins amid significant shifts in the world’s geopolitical order. Recent events such as the U.S. Presidential election and the United Kingdom’s historic vote to leave the European Union have brought with them a great deal of both political and economic uncertainty. At the same time, the ever-increasing dependence on technological advances characterizing all aspects of business and modern life has been accompanied by a rapidly growing threat of cyberattack and cyberterrorism, including to the world’s most critical commercial infrastructure. As political and commercial leaders grapple with these new realities, corporate risk taking and the monitoring of corporate risk continue to take prominence in the minds of boards of directors, investors, legislators and the media. Major institutional shareholders and proxy advisory firms now evaluate risk oversight matters when considering withhold votes in uncontested director elections and routinely engage companies on risk-related topics. This focus on risk management has also led to increased scrutiny of the relationship between compensation arrangements throughout the organization and excessive risk taking. Risk management is no longer simply a business and operational responsibility of management. It has also become a governance issue that is squarely within the purview of the board. Accordingly, oversight of risk should be an area of regular board assessment. This overview highlights a number of issues that have remained critical over the years and provides an update to reflect emerging and recent developments.

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