Roles of Risk Committee

Roles of Risk Committee 

A risk committee usually takes some of the roles of the audit committee, partly to help lighten its burden. 

The risk committee will assess the company’s risk strategy and advise the main board of its appropriateness. It will also assess how “embedded” the risk strategy is throughout the company and advise the board of how this can be improved. 

The committee will monitor overall risk exposure, and will monitor strategic risks in detail. Some monitoring of operational risks will occur, albeit to a smaller degree.

The risk committee will also oversee the risk management department to ensure that its concerns are being properly dealt with by the main board. Risk reports will be received from throughout the business to understand how successfully risk is being managed, and to help identify the emergence of new risks.

Some liaison with the audit committee is likely, as there is an obvious link between risks, controls, and the financial reporting function of the company.

Feedback will also be received from the internal audit department on recommendations for improvements in risk management processes and control systems.