ROLE OF RISK MANAGEMENT IN CORPORATE GOVERNANCE (CASE OF THE CZECH REPUBLIC)

Experience from the financial crisis shows that corporate governance heavily influenced the companies' economic situation. There were two main factors, responsible for the impact of corporate governance on companies' position: systems of managers' compensation and risk management. Companies with adequate system of these both factors survived better during the following recession and their competitiveness was on desirable level. Main aim of this paper is to concentrate on one of these factors - risk management and to specify the possible ways, how to implement different methods of risk management activities into Czech companies and how these activities can implement better organizational structure for smoother process of risk management. To study how listed companies perceive the importance of risk management at the board level, we compare annual reports from the years 2007 and 2012 of 12 companies listed on the prime market whose stocks are traded with. Paper concludes with proposals of more effective organizational structure and design of the risk management activities in the companies within the system of company corporate governance.