The Black Box of Risk Oversight - A study of the current state of board risk oversight practices

The purpose of this study is to explore how the board of directors perform risk oversight, providing a greater insight into what the board of directors actually do in the risk oversight process. The authors seek to map and investigate the practical part of the board's work in overseeing an entity’s risks and how it relates to theory. The research applies a mixed method approach, using both qualitative and quantitative data. With a cross sectional research design the process was divided into two phases, one explorative and one inductive. Where the exploratory phase, consisting of multiple interviews with specialists as well as board members, provided the necessary basis for the induktive phase where a survey provided the main empirical material. This thesis is based on relevant Risk Management literature, with further connections to Information asymmetry, Agency theory and Contingency theory. The empirical foundation consists of 5 interviews, consisting of two experts interviews and three board member interviews, and a survey with 50 responses from board members. This research concludes risk oversight practically performed by the board, as being contingent with a high focus on relationships and trust, not utilizing some key oversight processes and board members not being critical of their work and sometimes lacking knowledge.