Corporate
Governance Issues
Conformity
to External Standards is Not Enough
In
the increasingly complex world, the need for risk management,
compliance to regulations, norms and policies is growing,
as is the difficulty and cost in meeting (or failing to meet)
such standards. When your reputation and very existence as
an organization is at stake, it is not sufficient to merely
satisfy the letter of the law or react to industry norms.
More and more, companies must rely on internal risk control
policies to protect themselves on all fronts.
21%
of executives believe that their company
does not have a cost-effective process for ensuring compliance
with applicable laws, regulations and standards.
Source: PWC 2004
Effective
corporate governance certainly encompasses legal compliance
but, more importantly, it implements internal standards of
conduct and accountability throughout the organization.
The goal is not stronger regulation or controls, but value-driven,
voluntary and proactive adherence to internal/external standards.
Regulatory
Demand for Qualitative Data Creates Opportunities
Sarbanes
Oxley and Basle II have now decreed the mandatory reporting
of qualitative data. Arguably, any type of non-compliance
involving any regulations requires exposing the qualitative
data for judiciary judgements. The spirit of the law is clear.
Qualitative data addresses the area of human interactions
covering every fabric of corporate work. This diversity covers
the front office in high profile areas as misselling of investment
products and anti money laundering to back office activities
especially around the domains of security, finance, procurement
and human resources. However, the practical delivery of reporting
qualitative data is less clear. The regulators as usual wait
for the best of class benchmarks to emerge before firmer judicious
judgements are taken.
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