Risk Management and Corporate Governance

This chapter introduces the concept of risk management and corporate governance. The concept of risk management was embedded in corporate governance in the late 1990s. To understand more clearly how risk management came out of the corporate governance debate, it is necessary to look back into the development of ‘corporate governance’. Corporate governance provides a framework for all major organizations. Familiarity of one framework as opposed to another will often depend on the choice of framework and location of the organization. Corporate governance in itself is not new. The corporate governance frameworks in place now allow organizations to address the requirements to manage risk in a structured way. Auditing and monitoring are inherent to corporate governance frameworks and these systems can be developed to aid in the management of risk.