Effective corporate risk governance is crucial in today's fast-changing and uncertain world. Traditional approaches to risk management often fall short, as they struggle to keep up with the evolving business environment and changing regulatory landscapes. Our experience suggests that a few key principles and tools can be valuable in designing or reviewing corporate risk governance arrangements. These principles include maintaining strategic alignment, focusing on vulnerabilities, facilitating decision-making, and building a dynamic risk culture. However, many risk management frameworks fail to deliver on these pillars, as they are often slow to adapt and overemphasize risk reporting. To truly shape decisions and effectively manage risk, companies must adopt agile but robust approaches that can handle complexity and adapt to changing circumstances.
