Read the extract below and answer the questions that follow.

Board of directors today are more confident in their knowledge of the companies they serve and more strategic in their approach than they were in 2011, according to the latest McKinsey global survey on governance. They say a greater portion of their boards time is now spent on strategy, while they are spending less time than before on Mergers and Acquisitions (M&A). The share of time spent on strategy is even greater at private-company boards than at public companies, which tend to spend more time on compliance. While directors now report a more complete knowledge of various company issues than they did before, they say their boards struggle to understand and make time to manage business risksone of several areas where directors indicate room for further improvement. Another is the clear need for directors to spend more time on their role: the total number of days per year respondents say they spend on board work has not increased much since the previous survey. At boards where directors say their decisions and activities have a very high impact on company performance, though, respondents spend much more time in their role than others do. These directors also report using some best practices (such as resource allocation) that all respondents agree would most improve board performance. (Extracted from: Bhagat, C, Hirt, M and Kehoe, C (2013)) Using various resources conduct secondary research highlighting the reasons behind the failure by many organisations in understanding and managing business risks and provide motivations on why risk management should be prioritised. Student response should include the following: (1) Discussion of what risk management entails and how it has not been properly handled or prioritised in various organisations. (2) The discussion should be based on the evidence provided in the case study including other examples as provided by research. (3) The reasons on why risk management is important should also be considered and highlighted. (20 marks)