Lesson 4 Flashcards
Think of a business like a sports team. For the team
to win, everyone needs to play their part and
know what’s happening on and off the field.
3
means each player takes
responsibility for their role — if they make a
mistake, they own up to it and try to improve.
Accountability
is about making sure everyone knows the game plan, the score, and how
decisions are made.
Transparency
Businesses use certain tools and systems to make sure people take responsibility for their actions.
Key Mechanisms for Ensuring Accountability
Key Mechanisms for Ensuring Accountability
▪︎Clear Roles and Responsibilities
▪︎Performance Reviews
▪︎Setting Goals
▪︎Reporting Systems
▪︎Consequences and Rewards
When businesses are transparent, they share
important information like financial performance,
company goals, and decision-making processes. This
builds trust because employees and customers feel included and valued.
Transparency as a Driver of Trust and Performance
Transparency as a Driver of Trust and Performance
Open Communication
Financial Transparency
Decision-Making Processes
Trust Leads to Better Performance
Businesses that promote openness create a culture
where everyone feels safe to share ideas, ask
questions, and speak up when there’s a problem.
Best Practices for Promoting Openness in
Organizations
Best Practices for Promoting Openness in
Organizations
Regular Meetings
Open-door Policy Transparent Policies
Access to Information
(3) Governance and Risk Management
•Governance
•Risk Management •Identifying and Mitigating Governance-Related Risks
is how a business is run — the rules, processes, and practices that guide decisions and actions.
Governance
is about spotting problems before
they happen and making plans to avoid them or
reduce their impact.
Risk Management
Governance-related risks are the dangers that come from weak or poor decision-making, unclear rules, or lack of oversight.
Identifying and Mitigating Governance-Related Risks
Identifying Risks
*Lack of Accountability
*Poor Decision-Making *Compliance Failures *Conflicts of Interest
*Lack of Transparency
Mitigating Risks:
Clear Policies and Procedures:
Internal Controls:
RegularTraining:
Whistleblower Systems:
Independent Oversight:
Governance plays a huge role in keeping a
company’s money and day-to-day operations safe and efficient
Role of Governance in Financial and Operational
Risk Management
Financial Risk Management
°Budgeting and Forecasting
°Investment Decisions
°Fraud Prevention
°Debt Management
Operational Risk Management:
Efficient Processes
Quality Control
Workplace Safety
Technology Management
is a structured
approach businesses use to handle risks. It’s like a game plan that helps companies spot risks, understand them, and deal with them effectively.
Risk Management Framework (RMF)
A widely used framework that helps businesses identify, assess, and manage risks while aligning them with company goals.
COSO ERM (Enterprise Risk Management)
An international standard that provides principles and guidelines for managing any type of risk in any organization.
ISO 31000
