Revisiting board risk governance structures

COMPANIES today face increasingly complex risks, especially in relation to the gradual loss of market share to competitors and the impact of new technology. The board is ultimately responsible for assessing and managing these and other risks; but how it structures itself to discharge this responsibility varies.

The most common approach is to allocate risk governance to the audit committee, often renamed the audit and risk committee. In 2016, KPMG studied the disclosures of 100 listed companies in Singapore and found that 75 per cent had taken this course.

However, almost without exception, the audit committee's agenda is already crowded. Besides the heavy duty of reviewing the financial statements, it provides oversight on internal controls, fraud, whistle-blowing and other aspects of financial risks. A separate KPMG study found that 50 per cent of the mem…