Who is primarily responsible for the oversight of an organization's risk management process?

The primary responsibility for the oversight of an organization's risk management process lies with the board. The board of directors has a crucial role in establishing the organization’s risk appetite and ensuring adequate risk management policies and practices are in place. They are accountable for overseeing the management’s execution of risk management strategies and ensuring that risks are effectively identified, assessed, and managed in line with the organization’s objectives.

The board's involvement is vital because they provide governance and direction, ensuring that the organization operates within its risk tolerance levels. They also facilitate communication about risk throughout the organization, extending to stakeholders and ensuring that the overall risk landscape is continuously monitored and reported.

While senior management plays a significant role in implementing the risk management process and the internal audit team can assess its effectiveness, the ultimate accountability and oversight responsibility rests with the board. External auditors, on the other hand, focus on providing an independent assessment of the financial statements and may review risk management controls but do not oversee the process.