Following the 2008 financial crisis, Mary Schapiro, the former chairwoman of the Securities and Exchange Commission (SEC), said during testimony to the financial crisis inquiry commission that “the quality of a board's oversight of risk management – traditionally viewed as just a compliance cost – can make an enormous difference in our economy, and particularly in financial markets.”
The boards of banks were heavily criticised by investors and regulators for overseeing the incentive structures that allowed management teams to take big risks which eventually led to the crisis.
