Better Boards Through Better Risk Management Practices

Prior to 2008, it was not uncommon for a bank to assign its risk oversight responsibilities to the audit committee of its board of directors, or in some cases, to even divide those tasks between a number of other committees. Since then, a number of policies and guidelines have been enacted (including, notably, the Basel Committee for Banking Supervision's Corporate Governance Principles for Banks in July 2015) that set new standards and procedures with respect to how financial institutions are to monitor and moderate risk.

PricewaterhouseCoopers recently completed a study entitled Board Governance: Higher Expectations, but Better Practices?, which considers the policies and practices of the ten largest banks in the United States, focusing on boards of directors that have undergone significant changes including structural and functional transformation. The study finds that the impetus for these changes has largely been: (1) the need to comply with new or increasingly