Businesses have always needed to protect corporate assets and information. Corporate assets have become global networks of [electronic] information systems and the protection process has, out of necessity, evolved considerably in the present day.
Diligent Consulting assesses the issues surrounding risk management from a corporate governance perspective and tackles the value of internal control systems and methodologies and how they can be harnessed to build more robust sustainable business operations.
Corporate governance – from positive and negative perspectives – has made headlines recently as lawmakers around the globe have encouraged the introduction of guidelines designed to promote greater corporate accountability, transparency and stakeholder confidence. Directly resulting from these changes is increased accountability of company executives regarding risk control and management within organisations.
In South Africa, the release of the second King Committee Report (King II) in July 2001 highlighted the importance of risk management – as did the JSE Securities Exchange, in its published Listing Requirements Guidelines. Both proposed that company executives, collectively and individually, accept full responsibility for the accuracy of information relating to audited risk exposure. Moreover, King II recommends that organisations report on a “triple bottom line” which covers the social, economic and environmental aspects of the organisation – and not only on financial performance.
- Social aspects involve values, ethics and the reciprocal relationship with stakeholders other than the shareowners of the company.
- Environmental aspects include the effect that the product or services produced by the company have on the environment.
- Economic aspects refer to the financial performance of the company.
The report stresses the significance of non-financial issues such as human rights, ethics, and the AIDS pandemic – all of which are now seen as part of the responsibility of organisations.
In summation, the words of King II: “Successful governance in the world of the 21st century requires companies to adopt an inclusive approach that takes the community, its customers, its employees and its suppliers into consideration when developing the company strategy.” Diligent Consulting offers a full review of the organisations corporate governance and the role of risk management in the development of sustainable change for a sustainable business.