Hardware Solutions Ltd (HSL) offers to its client's hardware solutions, including chip manufacturing, planning and integration for a variety of uses. In a recently concluded Board meeting, while reviewing risk management

Hardware Solutions Ltd (HSL) offers to its client's hardware solutions, including chip manufacturing, planning and integration for a variety of uses. In a recently concluded Board meeting, while reviewing risk management practices of the Company, one of the Board members indicated about increased threat of new and severe non-financial risks which are now challenging basic assumptions about control effectiveness. For example, HSL so far has relied on automation to speed up processes, lower costs, and reduce manual errors. At the same time, the risks of large-scale breaches and violations of data privacy have increased dramatically, heightening during the COVID-19 crisis as digitization accelerated substantially. With less risk of manual errors but greater risk of large-scale failures, HSL will require to adjust their risk appetites and associated controls to reflect evolving risk profiles The Chief Risk Officer (CRO) of HSL agrees with the view of the Board member. He informed the Board that risk management strategies require revision and it should also cover the event of a major control breakdown, so that HSL is able to switch quickly to crisis-response mode, guided by an established Business Continuity Plan. He further agreed that HSL has done little to prepare for crisis, seemingly taking an attitude that it won't happen here and hence risk culture also need to be improved. There is a consensus that HSL will need to build crisis-preparedness capabilities systematically. As the COVID-19 crisis has demonstrated, companies with well-rehearsed approaches to manage through a crisis have been more resilient to shocks. The CRO further briefed the Board that preparation in this respect would involve identifying the possible negative scenarios unique to HSL and the mitigating strategies to adopt before a crisis hits. That includes periodic simulation involving both senior management and the Board. There is a plan to maintain and periodically update a detailed crisis management register. Their strategies would typically include details on when and how to escalate issues, preselected crisis-leadership teams, resource plans and road maps for communications and broader stakeholder stabilization. The internal auditor has also pointed out several control weaknesses and not appropriately recognising risk appetite in the context of control culture of the Company. In the background of aforementioned facts, answer the following questions: From a perspective of Companies Act, 2013 and SEBI regulations, discuss in detail the responsibility of Board of Directors relating to risk management.