CIA Part 1 - Governance

Governance

Combination of processes and structures implemented by the board to inform, direct, and monitor the activities of the organization towards achievement of its objectives

Stakeholders

Parties with direct or indirect interest in an organization’s activities and outcomes.

• The board;

• Management;

• Employees;

• Customers;

• Vendors;

• Shareholders;

• Regulators;

• Financial Institutions;

• External Auditors;

• The Public

Internal Mechanisms of Governance

Corporate charters & bylaws, boards of directors, and internal audit functions

External Mechanisms of Governance

Laws, regulations, and government regulators

Strategic Direction

Determining:

• The Business Model;

• Overall objectives;

• Approaches to risk taking (appetite)

• Limits of organizational conduct

Oversight

• Risk Management activities performed by senior management and risk owners

• Internal & External assurance providers

Board

Highest level body charged with governance.

• Guides and supervises organization’s actions and ensures Senior mgmt is held responsible for performance

• Group that grants Internal Audit its power to operate

• Duty of recognizing stakeholders - understanding what they want and desired results

• Oversees org’s ethical climate

Management

Day-to-Day governance functions; carrying out board directives to achieve objectives.

Determining:

• Where risks are managed

• Who will be risk owners

• How risks will be managed

Primarily responsible for establishing & maintaining organizational culture

Risk Owners

• Evaluate adequacy of R.M. activities’ design and ability to carry them out as designed

• Determine if R.M. activities are operating as designed

• Establishing monitoring activities

• Accuracy, timeliness, and availability of reporting data to Senior Management

Mission

Organization’s core purpose

Vision

Organization’s aspirations for what it intends to achieve over time

Core Values

Organization’s essential beliefs about org behavior