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this way, the board sets the bounds for the risks inherent in such functions as compliance, risk management, informational integrity, and even ethical obligations An aspect of good governance that reveals the true corporate culture is the provision of necessary and desirable tools such as best practices Good governors do not lay out demands and expectations without providing the means to meet them If sustainable compliance is one of the goals of the company s governing body, that body must be willing to provide the tools and resources necessary for sustaining compliance These resources may include personnel, IT technologies, and productivity tools The tone of governance is set by what the governors are prepared to offer along with their demands If the board does not increase the number of internal consultants over what the company had before Sarbanes-Oxley, it cannot expect to get any more internal control processing than it did before The same is true of training Good governance includes the recognition that if people are going to have different roles, or roles requiring certain skill levels, they must be given training For example, the board should ensure that there are people in the organization with skills in root-cause analysis The quality of the sustaining program will be measured by to the training offered to the various internal stakeholders Good governance also includes exhibiting and demonstrating a collaborative corporate culture with regard to change If the culture is to accept and even embrace change, the governors must allow the internal stakeholders to do so Governance will be collaborative if it can recognize the need for change as described by the various process owners or even process workers Management must not feel that it is the sole arbiter of what change is necessary and when Certainly, a scope and boundaries must be set for change management, but those decisions should be based on the input that only a collaborative environment will provide Because the entire functional operations of the company are now being defined in terms of processes, good governance requires that these processes be owned by responsible individuals; that is, the business process owners The culture of empowerment, especially as to process owners, has to e reinforced by good governance under which owners or leaders know their responsibilities and also their authority They need to be responsible for identifying the controls in their.

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requires that each company establish a whistleblower program and that this process be communicated to veryone in the organization The same is true of the ethics program The type of risk, the level of risk, and the scope of the risk scenario will determine the extent of the educational effort Once risks have been identified as being associated with specific processes, controls must be set in place to alert the necessary people These controls may block an action that would increase the risk, or they may be designed to detect certain actions or levels of performance that indicate an increased risk Controls, which are often monitoring tools set up as responses to strategic and financial risks, are usually the responsibility of management Assuming that some intelligence logic has been built into the system, however, some controls may by themselves eliminate some legal and operational risks Management usually handles the evaluation function of the risk cycle Managers will need to evaluate the results of the controls that have been used to identify risks that have crossed a threshold This threshold may be binary, indicating that something has been done or not done; or may be analog, in that a predetermined threshold that has been entered into the system has been crossed Executive Dashboards are examples of these kinds of risks, which are monitored for subjective analysis by management Managers are then responsible for making the risk responses, decisions, and actions Social risks are those created by the conduct of people, either inside or outside the organization These include conduct that could lead to civil liability; conduct that could lead to regulatory infraction; conduct that could cause economic loss or damage to the company s reputation; or conduct that violates the organization s policies and procedures (which are not necessarily mandated by outside agencies) An entirely different type of risk is associated with IT than with the rest of the organization Internal IT risks include the possibility of disruption in the information processing systems; there are employee risks associated with lack of training or motivation, change in jobs or roles, or change in management responsibilities External risk factors include technological developments, new or changed regulations or legislation, and, of course, natural calamities Often an IT department has a special subset of risk management called vulnerability management, which is responsible for discovering, evaluating, and fixing vulnerabilities of the IT systems.

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Again, management needs to work with the process owners, internal controls, and other stakeholders to set the policies regarding segregation of duties and the respective compensation controls Good governance requires that top-level management be intimately aware of all business processes Sarbanes-Oxley requires the CEO and CFO to sign off on the controls that are a part of all of the processes This level of engagement requires a collaborative effort, one that will exhibit and promote the established corporate culture This is one of the pillars necessary to ensure that Sarbanes-Oxley compliance migrates from being merely a project to an ngoing house process As noted earlier, risk management is not the same as risk avoidance It is a given that risks will be associated with many efforts, and that many of these risks will be assumed and accepted In its 2004 publication, Enterprise Risk Management: Integrated Framework, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) began its Executive Summary with the following definition:.Risk Management The underlying premise of enterprise risk management is that every entity exists to provide value for its stakeholders All entities face uncertainty and the challenge for management is to determine how much uncertainty to accept as it strives to grow stakeholder value Uncertainty presents both risk and opportunity, with the potential to erode or enhance value Enterprise risk management enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value Enterprise risk management is a process, effected by n entity s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify poten-. 2d Barcode In .NET Framework Using Barcode encoder for Visual .Related: 

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