Corporate Governance and Risk Management

Introduction Corporate Governance What does it mean? and Why does it matter? Risk Management Challenges of growth Organisational Development 

Corporate Governance: what does it mean? Corporate governance refers to the mechanisms, processes and systems by which corporations are controlled and directed 

Corporate Governance The Five Principles of Corporate Governance 1.Rights and equitable treatment of shareholders 2.Interests of other stakeholders 3.Role and responsibilities of the board 4. Integrity and ethical behaviour 5. Disclosure and transparency 

Corporate Governance: why does it matter? Big organisations take it seriously If your business is well governed, you will find it easier to borrow money and/or raise capital Independent non-executive directors can be helpful. In fact, if you get the right people, they can be very helpful. Your day-to-day business operations will be better. Improved Systems and Controls Improved Risk Management Improved Strategy Reputation 

6 Risk Management: Objectives  Give you a practical approach, framework and tools so you can start implementing risk management when you get back to the office.  Share some lessons learned. Share some tips and tricks.

7 Why do we need Risk Management? “ The only alternative to risk management is crisis management --- and crisis management is much more expensive, time consuming and embarrassing.”  Feature of good corporate governance  Managing growth is challenging

88 Risk Management is not easy, but it can be kept simple and logical A simple framework Evaluate & Take Action Evaluate & Take Action Establish Objectives Establish Objectives Identify Risks & Controls Identify Risks & Controls Assess Risks & Controls Assess Risks & Controls Monitor & Report Monitor & Report Step 1Step 2Step 3Step 4Step 5 Communicate, learn, improve

9 Risk Management is critical to ALL levels of decisions Decisions can be categorized into three types. The amount of risk (uncertainty) varies with the type of decisions. Most decisions are concerned with implementation.

10 Slide 10 Categorizing Risk – Comprehensive 1.Political or Reputational Risk 2. Financial Risk 3. Service Delivery or Operational Risk 4. People / HR Risk 5. Information/Knowledge Risk 6. Strategic / Policy Risk 7.Legal / Compliance Risk 8. Technology Risk 9. Governance / Organizational Risk

Slide 11 Risk Prioritization – likelihood and impact Likelihood of a risk event occurring  Very High: Is almost certain to occur  High: Is likely to occur  Medium: Is as likely as not to occur  Low: May occur occasionally Risk Impact: Level of damage that can occur when a risk event occurs  Very High: Threatens the success of the project  High: Substantial impact on time, cost or quality  Medium: Notable impact on time, cost or quality  Low: Minor impact on time, cost or quality

Slide 12 Risk rating …Combining impact and likelihood