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September 24, 2008 3:11 AM Age: 9 yrs
Accountability for Internal RisksCategory: Acc Research & Insights, CG Research & Insights, A/F Research & Insights, ERM Research & Insights, Eleanor Bloxham
Source: Eleanor Bloxham, CEO, The Value Alliance and Corporate Governance Alliance
Clearly, as they move forward boards will need to be more intelligent in their review of both internal as well as external risks. How to do this? A framework that recognizes their responsibilities to capital providers, customers, employees, suppliers and the community can provide a great starting point for this review.
Internally, one important area or risk is fraud. In that regards, first boards need to start with a review of themselves and the messages they are sending. In other words, they need to assess the tone (at the top) that they as a board are conveying through their actions and activities. Next, the board needs to assess the culture of the organization the board is overseeing. Third, they need to ensure controls and structures are in place to prevent and detect fraud in the organization.
I was asked to contribute to this recently released paper to provide my insights on the board’s role in fraud prevention and detection. This paper includes the detailed insights of others, with particular fraud expertise and emphasis on implementation and the role of both management and internal audit.
In the area of risks, boards need to start first with a review of themselves. Understanding their own responsibility in the process comes first. With their own assessment and hopefully their own house in order, then, they are well-positioned to provide proper oversight to others.
Eleanor Bloxham is a strategic governance and valuation authority, author and advisor, and CEO of The Value Alliance (www.thevaluealliance.com) and Corporate Governance Alliance. She welcomes your comments at email@example.com times viewed
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