Bazinga Games and Sports Ltd, a start-up catering to new games and sports activities was founded by Bose. The Company was funded by well-known investors and the planning for IPO was also going on. Methra, a Company Secre
CS Professional · Multidisciplinary Case Studies · PYQS · June 2025
Bazinga Games and Sports Ltd, a start-up catering to new games and sports activities was founded by Bose. The Company was funded by well-known investors and the planning for IPO was also going on. Methra, a Company Secretary and Corporate Advisory Professional, was appointed to review the existing governance processes and suggest recommendations, if any. She was also requested to do an evaluation from risk management perspective. While Mehtra's review was underway, she spoke to Bose about the changes they need to bring in the Company's practices especially from a governance risk perspective. When Bose asked her to explain, she said that governance risks refer to significant deficiencies that can severely affect the reputation, viability, and ongoing operations of an organization. These risks arise due to the failure of the Board to properly direct and control the organization or from inappropriate practices adopted by the Board itself. In some cases, collusion between management and the Board may override critical internal controls, leading to substantial financial losses. Additionally, the inability of the Board to identify key risk factors that could threaten business continuity further exacerbates these vulnerabilities. These failures are often a result of broader corporate governance shortcomings, where Boards fail to fully grasp the risks being taken by the company-whether through careless risk-taking or inadequate risk management systems. In many instances, lack of comprehensive oversight and accountability compounds the situation, leaving the organization vulnerable to external shocks, regulatory penalties, or operational breakdowns. Therefore, robust governance and risk management frameworks are crucial for ensuring long-term organizational stability and sustainability. In view of the above facts, highlight some of the sound practices for the Board of Directors which help to improve risk governance.
Answer & Explanation:
Some of the sound practices which can help the Board of Directors to improve risk governance: Establish clear risk governance framework: Board should set clear risk parameters and define the organisation's risk appetite, which guides decision making and ensures alignment with company's objectives. Risk management policies: Implement robust risk management policies to guide the identification, assessment and mitigation of risks Ensure Board expertise and diverse composition: Board should include members with diverse skills and expertise, particularly in areas of finance, law, operations and risk management. Foster open communication and accountability: Establish clear channels for reporting risks including regular updates from management on emerging risks and mitigation efforts. Engage in regular risk assessments: Board should ensure that the organisation regularly conducts risk assessments, both internal and external to identify emerging risks and trends. Promote risk aware culture: Board should set the tone for the entire organisation by emphasising the importance of effective risk management. Robust controls and compliance systems: Board must oversee the establishment of strong internal controls to prevent fraud, financial misreporting, operational failures. Effective collaboration between Board and the management: Board and senior management should share joint responsibility for risk oversight. While the Board provides governance, management is responsible for day-to-day risk management. Proactive crisis management and response plans: The Board should oversee development and testing of crisis management plans, ensuring that the organisation is ready to despond swiftly to emergencies or disruptions. Continuous improvement of risk governance practices: After significant risk events or incidents, Board should review the outcomes and lessons learnt. Incorporating these lessons into future risk governance practices enhances the organisation's ability to manage risks over time. Even otherwise, a periodical review of the risk governance practices is a must.
Topics: Risk Management
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