Integrity-Driven Performance. New Strategy for ... - GRC Resource

Governance ProcessesIn order to execute effective governance, boards and management must effectively oversee anumber of key business processes, including the following:• Strategy and operation planning• Risk management• Ethics and compliance (tone at the top)• Performance measurement and monitoring• Mergers, acquisitions and other transformational transactions• Management evaluation, compensation and succession planning• Communication and reporting• Governance dynamicsThese are all elements critical to a good governance process. Such was the overarching conclusionof a global study undertaken by PricewaterhouseCoopers to capture leading-edge ideas for howcorporate governance responsibilities can be effectively carried out. Results of the research werepublished by the Institute of Internal Auditors Research Foundation in 2000 in two reports,“Corporate Governance and the Board – What Works Best” and its companion report, “AuditCommittee Effectiveness – What Works Best.”The reports identified many of the weaknesses leadingto the governance failures of the past few years, and the recommendations were precursors to manyof the reforms that have been formalised in new corporate governance laws, regulations andstandards. Findings included observations that improvements are necessary in the oversight ofstrategy, ethics, risk management, performance measurement, stakeholder communication andinformation flow.Enterprise Risk Management ProcessesThe new COSO Enterprise Risk Management Framework and Application Guidance, whichPricewaterhouseCoopers authored on behalf of COSO, identify eight key elements of an effectiveenterprise risk management framework designed to help an organisation achieve strategic,operational, compliance and reporting objectives. These elements are:• Establishment of an effective internal environment• Objective setting• Event identification• Risk assessment22