CORPORATE GOVERNANCE AND RISK MGT
CORPORATE GOVERNANCE & RISK
MANAGEMENT
July 2012
Agenda
1
What is Corporate Governance?
2
What is Risk Management?
3
How do they intersect ?
4
Why is Risk Governance important - What is consequence of failure?
5
What to do (how do we respond?)
5
Discussion
2
1
WHAT IS CORPORATE GOVERNANCE?
Corporate Governance
• What is Corporate Governance?
• There are many definitions. The CBN Code of Corporate Governance defines it as follows: • Corporate governance refers to the processes and structures by which the business and affairs of an institution are directed and managed. In order to improve long-term shareholder value by enhancing corporate performance and accountability, while taking into account the interest of other stakeholders.
• Corporate governance is therefore about building credibility, ensuring transparency and accountability as well as maintaining an effective channel of information disclosure that would foster good corporate performance.
Corporate Governance
• For me, it is simply:
• Doing the right things and doing things right.
• In other words, “Doing the right things for the organization and doing things the right way independent of personal interests”
• We could say it is the Processes and Systems by which a company is governed which ensure appropriate checks and balances”.
• Essence is to ensure:
– Good performance of the organization
– proper accountability to all stakeholders
– mitigation of conflicts of interest
• Stakeholders include: Customers, Staff, Shareholders, Suppliers, Regulators,
Communities
Corporate Governance
Shareholders
Board of
Directors
Put in equity to set up the business Shareholders nominate a Board of
Directors to run the business on their behalf. They set the business policies
MD
Board includes a Management team led by the MD/Executive Directors who manage the business on a day-to-day basis. They design appropriate strategies to implement agreed policies Executive
Directors
Marketing
Product
MANAGEMENT
July 2012
Agenda
1
What is Corporate Governance?
2
What is Risk Management?
3
How do they intersect ?
4
Why is Risk Governance important - What is consequence of failure?
5
What to do (how do we respond?)
5
Discussion
2
1
WHAT IS CORPORATE GOVERNANCE?
Corporate Governance
• What is Corporate Governance?
• There are many definitions. The CBN Code of Corporate Governance defines it as follows: • Corporate governance refers to the processes and structures by which the business and affairs of an institution are directed and managed. In order to improve long-term shareholder value by enhancing corporate performance and accountability, while taking into account the interest of other stakeholders.
• Corporate governance is therefore about building credibility, ensuring transparency and accountability as well as maintaining an effective channel of information disclosure that would foster good corporate performance.
Corporate Governance
• For me, it is simply:
• Doing the right things and doing things right.
• In other words, “Doing the right things for the organization and doing things the right way independent of personal interests”
• We could say it is the Processes and Systems by which a company is governed which ensure appropriate checks and balances”.
• Essence is to ensure:
– Good performance of the organization
– proper accountability to all stakeholders
– mitigation of conflicts of interest
• Stakeholders include: Customers, Staff, Shareholders, Suppliers, Regulators,
Communities
Corporate Governance
Shareholders
Board of
Directors
Put in equity to set up the business Shareholders nominate a Board of
Directors to run the business on their behalf. They set the business policies
MD
Board includes a Management team led by the MD/Executive Directors who manage the business on a day-to-day basis. They design appropriate strategies to implement agreed policies Executive
Directors
Marketing
Product