The Australian Prudential Regulation Authority will consider the case for an independent board risk committee on financial institutions it supervises.In a speech to the Australian British Chamber of Commerce in Melbourne yesterday, John Laker, chair of APRA, noted that "our major regulated institutions have such committees and a prudential requirement would underpin this good practice."Laker said that the risk management function at banks and insurers had become a "more intense" area of supervisory focus.He said: "Supervisory agencies have clearly raised their expectations.  They want a strong, independent risk management function that covers risks across the entire institution and has the stature, skills and authority to ensure risk-taking remains within the board's risk appetite."Laker said APRA "has been active on the issue of risk appetite [and] identified a need for significant improvement in industry practice in this area."He said "some institutions lacked a clear board risk appetite statement or even an understanding of the concept."He said another "area of supervisory focus is the independent assessment of the risk governance framework" and may seek more third party (perhaps external auditor) reviews.He said "This is an area where supervisors may need to bring their expectations into line with emerging industry practice," with APRA taking a close look at insurers in particular.