“The company must be open to institutional activism and there must be greater emphasis on the non-financial aspects of its performance. Boards must apply the test of fairness, accountability, responsibility and transparency in all acts or omissions and be accountable to the company but responsive and responsible towards the company`s identified stakeholders. The correct balance between conformance and performance must be struck.” King II report
Diligent Consulting offers an opinion that there is only one option available to organisations in 2018: Harness the opportunity to add value to the organisation through the development of infrastructures that facilitate transparency at every level and manage risk accordingly. At the core of this opportunity should lie a comprehensive Risk Management system.
A risk management system, incorporating appropriate internal controls, will build a more robust and sustainable business from an operational perspective and deliver a demonstrable system of risk identification.
Risk management is central to sound corporate governance because it closes the loop (so to speak) between strategic initiatives and day-to-day operational performances. The foundation for dynamic goal setting, balanced scorecards, and guided analysis is also presented. Risk management requires:
- A commitment by management to the process
- A demonstrable system of risk mitigation activities
- A system of documented risk communications
- A system of documenting the cost of non-compliance and losses
- A documented system of internal control and risk management
- An alignment of assurance of efforts to the risk profile
- A register of key risks that could affect the shareowner and relevant stakeholder interests
Diligent Consulting offers executives a situational review, recommendations from same and an approach to Risk Management implementables that lay a firm foundation for sustainable business growth, based on Risk Management.