Risk Management for Boards

Flying Above the Turbulence of Liability & Peril
A Practical Path to Good Governance

The Risk Management Program for Boards is a practical approach to good governance that adapts well understood risk management technology for use at the board level. It will:

•  Significantly enhance your value as a board member or Board Chair
•  Retain the separation between the Board's domain and the CEO's domain
•  Help you manage director's liability by invoking the protection of the

   business Judgment rule
•  Help you exercise your independence and still have our board operate

   as a supportive team
•  Help you meet our obligations to the new standards of accountability

Governance is changing for corporations, large and small – and for not-for-profit enterprises as well.

The Risk Management Program for Boards gives you the tools to manage the change.

Directors can't run the business. We can't manage enterprise risk. We rely on the CEO to provide direction and leadership, and to manage enterprise risk.

Directors can manage the risk inherent in the CEO's leadership and management of enterprise risk. On behalf of the corporation and its shareholders we can:

• Hold the CEO accountable by monitoring his or her initiatives relative to the risks they present

  to the enterprise and to shareholder value.

• Ensure that the CEO's initiatives fall within the risk tolerance of shareholders and the board,

   and are in compliance with the demands of regulators.

• Ensure the board has the capacity to govern and manage its liability.

• Support the CEO's difficult decisions

Major changes to your board processes might seem an overwhelming task. The chair, the CEO, and directors have limited time. Asking directors to reconsider their role on the board may seem unrealistic for the same reasons.

In fact, these recommendations are routine management practices; they're just new to boards.

The responsibility for change will rest with the chair and/or CEO. Most directors will only be interested in seeing their time better used. Likely the help of the corporate secretary and an outside consultant will be required to set up the new processes and tailor them to your board's needs.

You'll need the first year to smooth out the rough spots. After that the advantages will be clearly visible:

• The levels of diligence required by the new standards will be more easily achieved, with better use of board

   and management time.

• The separation of the roles of the board and CEO will be more distinguishable.

• The board's ability to hold the CEO accountable will be enhanced.

• You'll see fewer crises.

• And as a bonus, the board's contribution to the company's health and profitability should increase.

Since the demise of Enron, the job of directors has exploded in volume. It's time for the process side to catch up. Otherwise, governance will become a full-time job.

For more information, click here: www.Governancetools.com