Compliance and Risk Management Committee

Compliance with laws and regulations applicable to the company’s business activities and identifying and managing the risks associated with those activities are two of the fundamental duties and obligations of the board of directors. The emergence of sustainability as a new factor for consideration in boardrooms has expanded the compliance duties to include adherence to voluntary standards that the board has committed to with respect to governance and environmental and social responsibility and broadened the definition of risks to include environmental and social issues and challenges. While creating a separate board committee to focus on compliance and risk management is not a new phenomenon, such committees have grown in importance and this chapter covers the role of the board and such committees in developing and overseeing compliance programs, elements of effective compliance programs, risk assessments and enterprise risk management systems and sustainability-related risks.