Necessary and Unnecessary Risk: Board Governance Handout

Boards are not asked to eliminate risk. They are responsible for ensuring exposure remains justified, owned, and sustainable.

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The distinction between necessary and unnecessary risk is central to that responsibility. Strategic risk should be deliberately authorised in pursuit of defined objectives. Exposure that persists without current justification, clear ownership, or capacity sustainability becomes unnecessary through governance drift.

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This board discussion handout provides a structured framework to support oversight of strategic exposure.