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Corporate governance

Managing risks at all levels of the organisation is an essential part of good corporate governance.

What is corporate governance?

Corporate governance is the way in which an organisation is controlled and governed in order to achieve its objectives and operate with integrity. Think of it as the glue that holds an organisation together.

How does risk management relate to corporate governance?

Risk management provides corporate governance with resilience. Good corporate governance is built on the relationship between:

risk management
the controls that are in place to mitigate risk
the organisation and its objectives.

Corporate governance principles

The concept of corporate governance embodies a number of accepted management tools which have been around for some time. The value of corporate governance is that it draws these tools together into a logical, interrelated set of principles.

The development of objectives and strategies through corporate planning and the establishment of controls (policies, procedures etc.) to ensure that the objectives will be met.
Operational plans are developed from the objectives and from these the organisational structure and the roles and responsibilities of members of the organisation are developed.
Delegations are put in place to ensure that responsibilities are matched with the necessary authority.
A code of conduct provides members of the organisation with the expected standard of behaviour and is directed at fraud prevention, client service and creating a culture that favours continuous improvement.
Reporting and monitoring processes are developed to ensure:
- conformance with laws, policies, procedures and the code of conduct
- performance against the corporate and operational plans.
Internal and external reporting provides accountability.

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