How many Banks in Sri Lanka have a Board of directors that understand Risk Management? How will they monitor their organizations’ risk-taking activities? Can they understand the level of compliance with the Integrated risk management framework?
Directors have the fundamental responsibility to learn about the risks that banks are exposed to and to ensure that these risks are well managed. This is key for good corporate governance. Banks must ensure the safety of the deposits entrusted to them by the public and having a board directors who are keen on preventing excessive risk taking will help banks prevent crisis situations caused by careless investment decisions. Therefore, they should be appropriately equipped to make such decisions by understanding how the Bank manages it’s risk and whether they walk the talk when they do fancy presentations to the board.