Final thoughts
If the ultimate ambition is to develop a true consensus about risk reporting, and in particular how risks are assessed, prioritised, mitigated and managed, then this review of European practices does not offer much ground for optimism. Despite the SEC’s stance, there seems little appetite in the US to move towards a more principles-based reporting approach, with a prevailing view that such a move would increase rather than decrease the prospect of litigation. The US approach might seem excessively cautious, but a legalistic perspective is so firmly embedded in US corporate decision-making that the prospect of change seems remote. There is more a possibility that European companies might in general become more cautious in their risk assessments, but the momentum for that would most likely come from a substantial increase in the number of businesses listing in the US. There seems little evidence for that at present. European and national regulatory bodies offer the best chance for a developing consensus, but it is clear that this task has only just begun. Having framed both rules and guidance for risk reporting, their efforts now need to focus on explanation, promotion – and enforcement.