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Assuring Responsible Risk Management In Banking: The Corporate Governance Dimension, Michael E. Murphy

Michael E Murphy

ABSTRACT The corporate governance dimension of risk management in banking concerns the structures needed to assure the power and independence of control centers. Three are clearly relevant: the risk management departments themselves, the audit function and particularly internal audit, and the contingent of independent directors on the board. A fourth, the shareholder base, is problematic. A survey of corporate governance disclosures reveals a need for more progress in assuring the independence of the risk management and internal audit functions by linking them more closely to the board. The board’s own capacity to function as an independent control center relates most …