A recent report issued by COSO, Board Risk Oversight:  A Progress Report, contains results of a 2010 survey of individual directors that sought to obtain information from directors about how risk oversight processes are applied by today’s boards and to obtain both current and future states of board risk oversight.  The results suggest that there are mixed signals about the effectiveness of board risk oversight across organizations and that there is significant room for improvement. 

While many boards believe they are performing their risk oversight responsibilities diligently and achieving a high level of effectiveness, a strong majority indicate their boards are not formally executing mature and robust risk oversight processes.  Most convincing is the finding that fewer than 15 percent noted the board is fully satisfied with their risk oversight.  Thus, there appears to be room for improvement among most directors surveyed.

This article highlights two overarching board risk oversight responsibilities and suggests several questions for the board to consider as it assesses its ability to assume those responsibilities.