It is no surprise that corporate boards are paying more attention to risk management. It is about time but change is slow to come in corporate board rooms.

The reasons for the change in corporate attitude is not just an unprecedented aggressive enforcement environment. It reflects the confluence of public attitudes toward business in the wake of the financial crisis and economic meltdown, political forces which partly reflect public opinion, growing frustration with the global marketplace, and the media focus on economic difficulties around the world.

Corporate boards face increasing scrutiny in everything they do, especially with regard to executive compensation arrangements. Individual board members are required to deal with threats of civil and criminal liability.

Board members need to ensure proper management and oversight of risks. That does not mean that boards have to identify and respond to each and every significant risk. It does mean that corporate boards need to monitor how a company manages its risks, responds to risks and minimizes risks.

The compliance tone-at-the-top integrates risk oversight into an overall corporate culture which emphasizes that compliance is an integral part of the overall business operations. That does not mean that a company avoids all risk. It means that the board should ensure that a company analyzes, assesses and decides on the amount of risk that it can tolerate as part of its business operations...