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Risk management as increased corporate governance requirement in Italian banks and insurance companies
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Abstract
The paper explores how risk management and internal audit functions can be used effectively to strengthen governance frameworks and ensure compliance with new regulatory requirements in the financial services industry. The aim of the paper is the description of the regulatory framework which gives great relevance to risk management both in banks and in insurance companies. A right and efficient risk management scheme, in fact, is based on efficient corporate governance of the financial intermediary. Better corporate governance ensures the achievement of risk management principles. For this, the paper explores the organizational and governance structure of financial intermediaries. The paper is a timely addition to the current discussion around the relevance of sound governance for banks and insurance. It extends the effort to evaluate risk governance standards at these financial intermediaries against regulatory requirements. The paper comes to the conclusion that risk mitigation as the process of reducing risk exposure and minimizing the likelihood of an incident needs to be continually addressed to ensure the business is fully protected and this aim is reached by linking controls to risks, activities, policies, and procedures and to track their effectiveness.
Keywords: Risk Management, Corporate Governance, Insurance Industry, Solvency II, Banks
Authors’ individual contributions: The author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.
JEL Classification: G21, G22, G32, K23
Received: 22.09.2019
Accepted: 13.12.2019
Published online: 27.12.2019
How to cite this paper: Cerrone, R. (2019). Risk management as increased corporate governance requirement in Italian banks and insurance companies. Corporate Board: Role, Duties and Composition, 15(3), 58-69. https://doi.org/10.22495/cbv15i3art5