Management's most important job is identifying, assessing and managing risk; how well it's perceived to perform this role is often reflected in a company's share prices.
After shocking corporate defalcations, high-profile prosecutions, Sarbanes-Oxley's passage and dozens of new regulatory requirements, focus on risk management has become clouded and diffused. This, in turn, often means management fails to address risk with directors and shareholders on a timely basis—or altogether—imperiling the value of a company's securities and ensuring embarrassment (or worse) when inevitable crises occur for which the company is unprepared.
While identifying, assessing and managing ...