"Foreword" [2010] ELECD 574; in van Daelen, Marijn; Van der Elst, Christoph (eds), "Risk Management and Corporate Governance" (Edward Elgar Publishing, 2010)

Book Title: Risk Management and Corporate Governance

Editor(s): van Daelen, Marijn; Van der Elst, Christoph

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849803953

Section Title: Foreword

Number of pages: 2

Extract:

Foreword
How much risk is a company involved in and how does it manage these
risks? These questions have probably been raised more often over the
last couple of years than any other business-related question. Risk man-
agement is high on the agenda of legislators, governments, supervisors,
consultants and, not least of all, companies, not only in the financial
sector, but also in many other businesses as well. The stakeholders and
shareholders also have huge expectations regarding the proper disclosure
of risk management. It poses other risks of which the appropriate balance
between (1) the necessary disclosure of risks and (2) the appropriate con-
fidentiality of some business activities is the most important one. It raises
important questions such as which types of transparency, standardization
and attestation rules can reduce the risk of misappropriation of corporate
funds, misstatement of financial reports and can also mitigate the engage-
ment in too-risky strategies. The processes and procedures that are devel-
oped both at the regulatory level as well as at the corporate level should
take into account standardization of the internal control and risk manage-
ment systems. Moreover the disclosure of these elements could overem-
phasize the actual risk and crowd out the agility of organizations and the
entrepreneurial spirit needed for the continuity of the organizations and
companies. Procedures to standardize the disclosure of internal control
and risk management systems are in place. A recent interesting example
of this development is the `High Level Principles for Risk Management'
of ...