Remarkably casual:
One of the interesting things [we found] was how informal a lot of the discussions between the board and the top management are in terms of risk management. You would think these days, companies would make these much more formal in terms of things like risk appetite. How much risk are we really willing to take on? Because the idea of risk management is not to get rid of risk. It’s to do things within your risk appetite and risk tolerance: “How much variability am I willing to take on this?” And you just look at the survey responses — these are people admitting that, “Well, if we do discuss this, it’s very informal,” and we found this very surprising given the atmosphere now. You would think boards would be much more formal in trying to figure out what is the risk appetite we want to go after. And what kind of tolerances — how much variability are we willing to accept once we’ve done this? But it’s very, very informal.
Remarkably casual:One of the interesting things [we found] was how informal a lot of the discussions between the board and the top management are in terms of risk management. You would think these days, companies would make these much more formal in terms of things like risk appetite. How much risk are we really willing to take on? Because the idea of risk management is not to get rid of risk. It’s to do things within your risk appetite and risk tolerance: “How much variability am I willing to take on this?” And you just look at the survey responses — these are people admitting that, “Well, if we do discuss this, it’s very informal,” and we found this very surprising given the atmosphere now. You would think boards would be much more formal in trying to figure out what is the risk appetite we want to go after. And what kind of tolerances — how much variability are we willing to accept once we’ve done this? But it’s very, very informal.
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