An organization’s SUCCESS is, in large part, driven by how wisely it takes risks and how effectively it manages the risks it faces. The enterprise’s culture comes into play here because people tend to do what they are rewarded to do. When selecting, evaluating, and COMPENSATING the CEO, the board sets the tone of the organization’s risk culture. It’s important to think through all POTENTIAL implications - ntentional and unintentional - of executive rewards to MAKE sure the board is encouraging people to take risks intelligently. Similarly, the board should also understand how incentive programs implemented throughout the organization may influence the risk culture below the C-Suite.

An organization’s success is, in large part, driven by how wisely it takes risks and how effectively it manages the risks it faces. The enterprise’s culture comes into play here because people tend to do what they are rewarded to do. When selecting, evaluating, and compensating the CEO, the board sets the tone of the organization’s risk culture. It’s important to think through all potential implications - ntentional and unintentional - of executive rewards to make sure the board is encouraging people to take risks intelligently. Similarly, the board should also understand how incentive programs implemented throughout the organization may influence the risk culture below the C-Suite.