Risk mania has taken over the corporate governance discussion today but defining risk and figuring out how to deal with it can be dizzying for boards.

Dinesh Paliwal, the chief executive officer of Harman, a wholly owned subsidiary of Samsung Electronics Co., who serves on the boards of Bristol-Myers Squibb, Nestlé and Raytheon Company, has a simple definition that guides his work. Risk, he says, comes down to two core considerations — “performance and reputation.”