05. Governance, RM, Sustainability

Question 1

Risk Management needs Corporate Governance: Why

Answer 1

1) Preventing Corporate Scandals such as accounting fraud, for ex.
2) Protecting Shareholder Interests and protecting them
3) Enhancing company’s Reputation
4) Compliance with Regulations.
5) Managing Risk: strong governance can identify and mitigate risks.

Question 2

ways in which sustainability is expressed in corporate governance?

Answer 2

• Lowest: mere expresion of principles.
• Intermedite: sustainability plan which leads to renumeration activities.
• Higher: Sust. plan fully integrated with the buisness model.

Question 3

How to Design Good Corporate Governance and Risk Governance: 6 Pillars

Answer 3

a. Role of the board of directors: defines strategy, governance system, promotes dialogue with stakeholders
b. Composition of the corporate bodies: executive and non executive directos
c. Functioning of the board of directors and the role of the chair: defines rules. establishes board committees.
d. Appointment of directors and board evaluation: appointment and succession of directors is transparent. evaluates periodically its effectiveness and contribution. Nomintion committe.
e. Remuneration: the variable compensation is designed by risk and ESG linked parameters.
f. Internal control and risk management system: set of rules and procedure.