ICGN corporate risk oversight guidelines: The role of the board and institutional shareholders

Oversight of risk has become a significant issue in the corporate governance debate following the failure of traditional institutions. In the aftermath of the crisis, the International Corporate Governance Network (ICGN) developed the ‘ICGN Corporate Risk Oversight Guidelines’ to help institutional investors assess how effectively the boards of their portfolio companies carry out their oversight function regarding financial and non-financial risk. The ICGN Guidelines reflect a consensus achieved during a year of discussions between technical committee members, the sounding board and contributors of comment letters, who represented various institutions and jurisdictions across the world. These debates have culminated in a document that discusses not only the board and company process of risk management and risk oversight and disclosures concerning financial and non-financial risks, but also the investors' responsibilities in oversight and their communication with the companies. The purpose of this paper is to present the ICGN Guidelines with a commentary linking it to the current debate and developments in the corporate world.