"Several large companies and financial institutions worldwide no longer exist today as they neglected the basic rules of Corporate Governance, Risk Management and Control". Comment in the background of today's business e

The importance of corporate governance in risk management is amply supported by the reasoning of the Kumar Mangalam Birla Committee on Corporate Governance to implement corporate governance in India. Risk Management is an integral component of corporate governance and good management. There is a growing realization that corporate governance has an impact on enterprise risk management. Several large companies and financial institutions worldwide no longer exist or have been taken over precisely because they neglected the basic rules of risk management and control. Some common risk management problems in relation to corporate governance that appeared in many financial institutions before and during the crisis according to the OECD (2009) was because of following reasons: Risks were frequently not linked to strategy which is a key issue to ensuring that risk management has a focus on the business context; Risk definitions are often poorly expressed. Better risk definitions (context, event. consequence) are contrary to a lot of current thinking in risk management which has shorten risk descriptions to the smallest number of words possible; Organizations weren't always in a position to develop intelligent responses to risks; Boards didn't take stakeholders and guardians into account in detailing responses to risk; Important parts of the value chain were outsourced to others.