Today, risk committees are required at which type of institutions?

Risk committees are primarily mandated in financial institutions due to the regulatory environment surrounding them. After the financial crises and heightened regulatory scrutiny, many governments introduced comprehensive regulations aimed at ensuring sound risk management practices. Financial institutions deal with numerous types of risks, such as credit risk, market risk, operational risk, and reputational risk, among others.

The establishment of risk committees is intended to ensure that there is a dedicated team focused on identifying, assessing, and managing these risks effectively. These committees oversee the institution's overall risk framework, ensuring that the strategies are in line with regulatory requirements and corporate governance best practices. They play a pivotal role in maintaining financial stability and protecting the interests of stakeholders, which is crucial in the highly interconnected financial systems of today.

In contrast, while other types of organizations, such as healthcare, non-profit, and educational institutions, face risks as well, the specific regulatory requirements for risk committees do not typically extend to them in the same formalized manner as they do for financial institutions. Hence, the requirement for risk committees is most prominent in the financial sector.