By Welcome Gogobo
Corporate governance
is the system of rules, practices, and processes directed and controlled by an
organisation or industry.
It essentially
involves balancing the interests of a company's many stakeholders, such as
shareholders, senior management executives, customers, suppliers, financiers,
the government, and the community.
Since corporate
governance also provides the framework for attaining a company's objectives, it
encompasses practically every sphere of management, from action plans and
internal controls to performance measurement and corporate disclosure to
increase accountability and facilitate prudent management. Compliance is the
process through which companies demonstrate that they have conformed to
specific requirements in laws, regulations, contracts, strategies, and
policies.
What Is Governance, Risk Management, and
Compliance (GRC)?
The overall purpose of
GRC is to reduce risks and costs and duplication of effort. It is a strategy
that requires company-wide cooperation to achieve results that meet the three
essential functions' internal guidelines and processes.
The three elements of GRC are:
·
Governance, or
corporate governance, is the overall system of rules, practices, and standards
that guide a business.
·
Risk, or enterprise
risk management, is identifying potential hazards to the business and acting to
reduce or eliminate their financial impact.
·
Compliance, or
corporate compliance, is the set of processes and procedures that a company has
to make sure that the company and its employees are conducting business legally
and ethically.
Today's organisations
work harder than ever to adapt to a rapidly changing world. They require
effective corporate governance that can help them increase their accountability
and avoid significant disasters while being more responsive to stakeholder
concerns and more transparent with investors. From the technical
responsibilities of a board to the nuances of guiding an organisation through
contemporary challenges, the corporation gets a comprehensive overview of the
role of corporate governance and gains critical insights into the realities of
board service.
The need for compliance documentation
The regulatory context
demands a high level of transparency and accountability from all corporate
businesses. A rigorous and disciplined compliance process supports and sustains
the corporate governance and risk management systems and structures that direct
the business activities.
In general, the
compliance function must assist in implementing related compliance documents
that protect the integrity of the organisation's compliance program and provide
evidence that the organisation is compliant with applicable laws, regulations,
and program requirements.
In effecting and
managing this, one needs a compliance process to implement a compliance risk
management whereby a compliance universe is determined, and the applicable laws
and regulations are rated, managed, and monitored.
The approach is to
roll out the compliance risk approach guided by the phases for its
implementation.
These are:
·
Compliance risk
identification
·
Compliance risk
assessment
·
Compliance risk
management
·
And Compliance risk
monitoring
