Government Regulations

Both Congress and the SEC have made it clear that risk management is high on their agendas of corporate governance issues. Senator Schumer’s Shareholder’s Bill of Rights would mandate that all issuers create a special committee composed exclusively of independent directors responsible for establishing and evaluating the company’s risk management practices.

SEC Rule 33-9089 requires disclosure in a proxy statement regarding the board’s role in the company’s risk management process, and the effect that this has on the manner in which the company has structured its leadership. Chairman Schapiro expects that such rules will provide investors and the market with better insights into how each company and each board addresses the vital task of managing risk.

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