A new Corporate Board Member/EY Center for Board Matters survey of nearly 150 US public company directors finds that boards are devoting more agenda time to risk oversight, although many have yet to translate that increased focus into governance practices that more closely connect risk discussions with strategy. The survey also suggests that many companies continue to operate without a formally documented risk appetite.
Key findings include:
- Risk is receiving more board attention: 60% of directors report their boards have increased the time devoted to risk oversight over the past two years; however, only 39% say risk discussions have become more closely integrated with strategy, 32% report improved reporting on emerging risks, and 22% noted increased use of scenario planning.
- Directors view management's risk reporting positively overall: More than 70% of directors rate reporting on forward-looking insights and strategic implications as robust and free of material gaps.
- Risk appetite often remains undocumented: While 58% of boards reassess their company's risk appetite continuously or as risks evolve, only 43% of respondents say their company's risk appetite is formally articulated and documented. Another 25% indicate it is generally understood but not documented, and 29% say it is articulated but not formally documented.
The survey also identifies technology—particularly AI—as one of today's most significant emerging risk areas and highlights growing concerns regarding third-party and vendor dependencies.
This post first appeared in the weekly Society Alert!