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Risk committees key to corporate success: RIMS

Risk committees are essential if companies are serious about protecting their assets, the Risk and Insurance Management Society (RIMS) says in a new report.

Creating and strengthening a “risk-aware” culture is one of the key benefits of setting up such committees, according to the global non-profit organisation.

“Breaking down the silos within an organisation and getting everyone thinking about risk is a goal towards which many risk professionals aim,” RIMS President Rick Roberts says in the report. “A risk committee is a sure-fire way to achieve this fundamental risk management objective.”

The report – Exploring the Risk Committee Advantage – is based on interviews with practising risk professionals from US-based RIMS’ board.

They suggest an effective committee features several common traits, including a clear purpose and a focus on its objectives, responsibilities, structure and process for reporting and monitoring.

“Because of its structure, a risk committee will help put a timeline on resolution, so the risk is avoided or mitigated and the organisation is able to protect assets, or if it’s an opportunity, quickly take action so you don’t miss the chance to increase revenue,” Mr Roberts says.

Risk committees became mandatory for listed US financial institutions, excluding banks, after the 2008 financial crisis.