COVID-19 May Force a Board Rethink on Committee Structure and Risk
Committee structure can play a key role in approaching risk oversight and is a perspective for fund boards to reconsider amid the uncertainty of the ongoing Covid-19 crisis.
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Most boards do not have standing committees specifically dedicated to risk oversight, and the ones that do tend to be larger, according to Stacy Louizos, a partner at Blank Rome. “The risk committees I’ve seen, which are less common, have been with larger fund complexes,” she says. “There’s more to oversee. There’s a larger board. Obviously it’s an important part of the board’s oversight role, so … given their structure, some boards may have decided it makes sense to have somebody doing the deeper dive.”
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“When liquidity risk management program rules came out, some boards delegated a few of their members, perhaps, to be on an ad hoc committee to deal more closely with management and on the details of putting those programs in place,” Louizos says. “So they don’t start a new committee but they maybe delegate a few of their board members to take the deeper dive.”
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“COVID-19 May Force a Board Rethink on Committee Structure and Risk,” by Ben Sheng was published in Fund Directions on October 1, 2020.