What is Risk Governance in an organisation? What steps may be taken by the Board to achieve Risk oversight in an organisation ?

Risk governance includes the skills, infrastructure (i.e., organization structure, controls and information systems), and culture deployed as directors exercise their oversight. Good risk governance provides clearly defined accountability, authority, and communication/reporting mechanisms. The board shall have to identify the extent and type of risks it faces and the planning necessary to manage and mitigate the same for ensuring growth for the benefit of all the stakeholders. Therefore, the Board has to define a risk philosophy and the extent to which it is willing to accept any consequence of taking of risks by the organisation and its functionaries in its day-to-day functioning. A strengthened management information system (MIS) supported by robust information technology platform is a necessary pre-requisite for enhancing Board efficiency in oversight and decision making. Similarly, augmented skill sets and experience at the level of independent directors would go a long way in enhancing the Board capacity. Strong MIS facilitates risk reporting to the boards in an effective and comprehensive manner, which in turn enhances transparency and causes informed decision taking. Robust information technology systems are a necessary condition for supporting the MIS framework as the quality of risk information that the Boards and the top management receive depends largely on the quality and robustness of the information technology systems. The risk management committees have an important role to play in the overall risk governance framework. Apart from monitoring the company's strategic-risk profile on an on-going basis, such committees would also be responsible for defining the company's overall risk appetite; approving major transactions above a company's risk threshold, and; establishing limit structures and risk policies for use within individual businesses. Risk oversight is the responsibility of the entire Board and the same can be achieved through a review mechanism which inter-alia could include: Developing policies and procedures around risk that is consistent with the organization's strategy and risk appetite. Taking steps to foster risk awareness. Encourage an organizational culture of risk adjusting awareness. Maintenance of a Risk Register. A compliance certificate on the identification of risks and establishment of mitigation measures.