Risk Management Module 7

This document discusses risk governance and corporate governance. It defines corporate governance as covering topics related to successfully governing organizations, including risk management. It notes several principles of corporate governance like equitable treatment of shareholders and the responsibilities of boards. Specific guidelines for corporate governance in banks, government agencies, and regarding stakeholder expectations are provided. The roles of committees like the risk management and audit committees are also outlined.

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Risk Management Module 7

Uploaded by

John Rey Mercurio

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Download as DOCX, PDF, TXT or read online on Scribd

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RISK MANAGEMENT

President Ramon Magsaysay State University

(Formerly Ramon Magsaysay Technological University)
College of Accountancy and Business Administration
Iba, Zambales, Philippines
Tel/Fax No.: (047) 811-1683

College/Department College of Accountancy and Business Administration

Course Code Major Elec 2
Course Title RISK MANAGEMENT
Place of the Course in the
Major Subject
Program
Semester & Academic
First Semester AY 2021-2022
Year
Author JOHN REY MERCURIO

Chapter VII
RISK GOVERNANCE
Discussion:
What is Corporate Governance?
- Corporate governance covers a very wide range of topics, and risk
management is an integral part of the successful corporate
governance of every organization. Most countries in the world
place corporate governance requirements on organizations. These
requirements are particularly strong in relation to companies
quoted on stock exchanges, organizations that are registered
charities and government departments, agencies and authorities.
For instance, companies listed on the London Stock Exchange

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have to be guided by the Combined Code on Corporate

Governance published by the Financial Reporting Council
Appropriate Committee
 risk management committee;
 audit committee;
 disclosures committee;
 nominations committee;
 remuneration committee.
Principles of Corporate Governance
 Effective corporate governance framework
 Rights of shareholders
 Equitable treatment of shareholders
 Role of stakeholders in corporate governance
 Disclosure and transparency
 Responsibilities of the board
Corporate Governance of a bank
- Corporate governance and risk management activities within a
financial organization are strictly governed and regulated. Most
financial organizations, including banks, produce their own
internal corporate governance guidelines. Typically, these
guidelines will cover director qualifications, director
responsibilities and the responsibilities and delegated authority of

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board committees. The guidelines should also consider

arrangements for the annual performance evaluation of the board
and the arrangements for senior management succession.
Corporate Governance for a government agency
- For government agencies, robust corporate governance
arrangements are usually mandatory. Also, for many government
agencies, the main reason for paying attention to risk management
is to ensure that adequate corporate governance arrangements are
in place. In other words, the main motivation for ensuring good
standards of risk management in a typical government agency will
be the desire to support the corporate governance arrangements in
the agency.
Public Life
 Selflessness
 Integrity
 Objectivity
 Accountability
 Openness
 Honesty
 Leadership
Evaluation of board performance
 membership and structure;

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 purpose and intent;

 involvement and accountability;
 monitoring and review;
 performance and impact.
Stakeholder Expectation
- Organizations will have a wide range of stakeholders, some of
whom may indeed be unwanted as far as the organization is
concerned. For example, if a distribution company wishes to build
an extension to its depot, local residents may want to object to it.
The local residents are stakeholders in the operation of the
company, even though the owner of the company may not wish to
acknowledge that fact.
There will be a wide range of stakeholders in a typical sports club and
these will include the
following:
 supporters;
 players;
 staff;
 financiers;
 sponsors;
 suppliers and manufacturer.

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