What does risk governance encompass within an organization?

Risk governance encompasses the oversight and decision-making processes regarding risks within an organization. This includes the establishment of frameworks and policies that ensure risks are identified, assessed, managed, and monitored effectively. It involves creating a structured approach to risk management that aligns with the organization’s objectives and strategies.

The reason oversight and decision-making are paramount in risk governance is that it enables organizations to respond promptly and accurately to potential threats, ensuring that risks are integrated into the overall governance framework. This results in a more resilient organization capable of navigating uncertainties in both its internal and external environments.

While activities for supervision and risk-taking, practices for risk communication, and employee training on risk management are important components of a comprehensive risk management strategy, they are subsets of the broader scope of risk governance. Governance itself focuses more on the strategic management and oversight of risks rather than the specific implementation of practices or training initiatives.