Which committee typically oversees risk management in the absence of a dedicated risk committee?

The audit committee plays a vital role in overseeing risk management, especially in organizations that do not have a specialized risk committee. This committee is traditionally responsible for monitoring the integrity of financial reporting and the effectiveness of internal controls, which naturally extends into examining potential risks that could impact the organization's financial health.

By overseeing the risk management framework, the audit committee ensures that the organization identifies, assesses, and manages risks appropriately. This involves working closely with management and auditors to evaluate financial risks and compliance issues, contributing to a comprehensive understanding of the organization's risk profile.

While other committees, such as the nominating and governance committee, compensation committee, and ethics committee, may have important functions, they do not primarily focus on risk management. The nominating and governance committee is mainly concerned with board composition and governance practices, the compensation committee deals with executive compensation and performance evaluation, and the ethics committee typically addresses ethical conduct and compliance matters. Therefore, the audit committee is uniquely positioned to oversee risk management in the absence of a dedicated committee.