Risks directly impact revenue and profit.
There is a domino effect. The influence that risk management and compliance has on accurate decision making is far reaching – and it cascades from top management all the way down to operational staff …and sometimes back up again. If one domino misses its mark, the whole trail is compromised.
How are you currently evaluating the effectiveness of your corporate governance efforts to make sure they hit their mark? A successful corporate governance program relies on input from business users – and risks and controls only have meaning when they have context, which is accomplished using a corporate governance framework.
As many recent examples have proven, defining the right framework is not enough to guarantee success. Here are 5 key best practices to adopt:
Having a “just to pass” culture when it comes to regulatory requirements is dangerous and could disrupt the path of your dominos. Not every organization has the same goals, risk appetite, and Governance, Risk and Compliance (GRC) culture, yet they all need to make the decisions about how to optimize their business and protect their company. Going through the motions and completing the administrative tasks needed for risk, compliance, and internal audit without demonstrating concrete value to the company is no longer acceptable.
A company must establish a risk tolerance and corporate governance culture that is supported by the executive team and, in some cases, the board of directors. Without formal support (including training and communication throughout the company), a corporate governance framework that correlates complex risks, controls and business processes will not be as effective as it could be – and you’ll eventually miss your mark.