The Central Elements Of Corporate Governance

Among the outgrowths in the United States is the Sarbanes-Oxley Act of 2002, and similar legislation has been enacted or is being considered in other countries. This law extends the long-standing requirement for public companies to maintain systems of internal control, requiring management to certify and the independent auditor to attest to the effectiveness of those systems. Internal Control – Integrated Framework, which continues to stand the test of time, serves as the broadly accepted standard for satisfying those reporting requirements. This Enterprise Risk Management – Integrated Framework expands on internal control, providing a more robust and extensive focus on the broader subject of enterprise risk management. While it is not intended to and does not replace the internal control framework, but rather incorporates the internal control framework within it, companies may decide to look to this enterprise risk management framework both to satisfy their internal control needs and to move toward a fuller risk management process. Among the most critical challenges for managements is determining how much risk the entity is prepared to and does accept as it strives to create value. This report will better enable them to meet this challenge.

The questions aim to understand risk management practices in the insurance sector. They are split into 3 sections: risk management culture, risk control and emerging risks management, in order to explore the enterprise risk management practices through examining the components.

Identify the potential risks which affect the company and manage these risks within its risk appetite;

However, companies generally adopt a methodology for overall risk assessment. Sometimes these methodologies involve the assignation of risk oversight to leaders in each area. The approach is based upon the assumption that each area knows itself best. However, this often overlooks potential issues in favor of confronting them after they develop. As the need for

Kluyver, C. (2013). A primer on corporate governance (2nd ed.). New York, NY: Business Expert Press.

Risk refers to a likelihood, probability, a chance that a loss may occur in a given organization. Most of the times, there is a high risk when there is vulnerability. In this case, vulnerability refers to a weakness that the organization has. Risk assessment refers to the process of identification of potential hazards and proper analysis of the expected losses if those hazards occur (Homeland Security, n.d.). Risk assessment as a way of profiling risk according to impact to the organization. Some organizations have business impact analysis exercises geared towards determination of potential hazards based risk assessment approaches. Organizations’ risk differ depending on the size and the type of business they are doing. The disparity in organizations’ risk call for different adaptation of risk assessment approaches. Even with the disparities of the businesses, proper risk management not only ranks the risks according to the seriousness but also identifies the best methods to control risks in an organization.

Because of rapid economic growth in XXX over the past years has increased the fear of major business failure, risk has become an overwhelmingly dominant business topic. As a result, top managers are now focusing on risk management in their companies. As each business entity struggles with its own set of needs and circumstances, the need and flexibility to address this continuously changing and volatile economic environment, would be extremely challenging and fulfilling to me.

This was a very interesting article, in my opinion it brings to mind the derived phrase, which came first the chicken or the egg. Meaning, is corporate governance an attempt to control the results of unethical practices of corporations or is it meant to deter them. In reading this article, it is clear that certain corporations practiced unethical business behaviors for self-interest, but the questions this author have are: 1. Should corporate governance be regulated by the legislature as well as the organization and to what degree, 2. Is corporate governance, there to protect the shareholder or the stakeholder, 3. How effective is corporate governance on a global level. The need for a governance system is based on the assumption that the separation between the owners of a company and its management provides self-interest executives the opportunity to take actions that benefit themselves, with the cost of these actions borne by the owners (Larcker & Tayan, 2008).

The categories of the Literature Review are (1) The Rise of Risk Management as a Governance Issue, and (2) Leadership Before Governance. The different sources referenced in the Literature Review are Almquist et al, (2012), Williamson (1996), RiskCover (2011), Aguilera & Cuervo-Czurra (2009), Johnston (2004), Hoyt & Liebenberg (2011), Kunreuther et al, (2013), Mongkol (2011), Levy et al (2010), Stevulak & Brown (2011), Paine (1994), Whetston (2005), and

Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. (Lecture notes)Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001)

This paper examines the risk governance can aim the boards to achieve expected risk oversight outcomes. This paper introduces the risk oversight function that is the responsibility of the boards, and reviews the origin and development of risk governance theory. Also, it discusses both risk governance frameworks and ISO 3000’ approach to the risk governance. At the end, there is an analysis of limitation of risk governance as pragmatic guidance for directors, and recommend 1) reducing risk governance limitation; 2) a structured approach aimed at continuous improvement

“A Chicago teenager is looking for fun at home while his parents are away, but the situation quickly gets out of hand” (IMDB, 2014). This is the logline for the Tom Cruise movie Risky Business. In the wake of the global economic crisis, questions are being asked if company’s were just having too much fun while the parents were away. Effective corporate governance and risk management are two systems that can help a company achieve greater productivity, profitability and growth. If mismanaged, they can possibly cause said company to collapse or negatively affect all stakeholders. Across the theoretical literature, there has been a shift in attitudes and now some question whether corporate governance was really at the core of the fault of the global economic crisis. It is presented that despite these growing literary trends, both corporate governance and risk management are causally linked and an imperative for the sme, new start up or global corporation. In addressing this issue, Risk management and corporate governance will be examined in detail with reference to current literature, opinion and supported by a few key case studies.

One well accepted description of risk management is the following: risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. In order to apply risk management effectively, it is vital that a risk management culture be developed. The risk management culture supports the overall vision, mission and objectives of an organization. Limits and boundaries are established and communicated concerning what are acceptable risk practices and outcomes. Since risk management is directed at uncertainty related to future events and outcomes, it is

(D 'Arcy, 2001) proposed that the origin of risk management was developed by a group of innovative insurance professors Robert I. Mehr and Bob Hedges in 1950s . The objective of risk management at that time was to maximize the productive efficiency of the enterprise. At that time, risk management was specifically focused on pure risk and speculative risks.

In the highly competitive global environment, organizations are facing more uncertainties and risks that any organization should pay more attention to risk management. According to an effective governance, organizations can take opportunities successfully, and a good risk management can be the fundamental security for effective governance. (reference1)