Governance risk and compliance – In order to understand the concept of corporate governance, one needs to understand the three key concepts: risk, control, and responsibility. These are not static concepts but are dynamic as well, particularly in today’s highly competitive business environment. In addition to the continuous changes in risk and control, there are also endless opportunities for creativity as organizations evolve along with the market. Thus, one must be prepared to consider all the various contributions that these factors can make to the organization and the way it will conduct its business in the future.
The basic idea behind corporate governance is the protection of the investment portfolio and the profitability of the company. Corporate governance therefore encompasses a wide range of activities, including risk assessment, risk control, compliance management, accountability and performance oversight. The purpose of risk assessment is to identify and quantify the risks that could affect a company and its markets. Risk control is the process of ensuring that risks are mitigating or mitigated. Compliance management ensures that the company adheres to applicable laws, regulations, standards, and best practices.
Corporate governance thus covers many activities that help ensure the long-term viability and success of a company. However, just like any other management concept, it is often considered as a complex area and there is great variation in the levels of responsibility and obligation attached to different areas. It is crucial that companies have an area of common focus and that all the different stakeholders are committed to the same objectives. This way, company goals can be aligned and risk and safety can be maximized through the same processes.