Organizational

Governance

Prepared by:
GULBEN
LOPEZ
OBLIANDA
VASQUEZ
 ORGANIZATION
A collection of people, who
are involved in pursuing
defined objectives.

DEFINITION GOVERNANCE
Latin - “gubernare” or
Greek - “kubernaein”
which means to steer

The manner of steering or

governing, or of directing
and controlling, a group
of people or a state.
ORGANIZATIONAL
GOVERNANCE
“A system by which an
organization makes and
implements decisions in pursuit
of its objectives”
- ISO 26000

Holistic approach encompassing

the processes, standards, rules,
and practices an organization
follows. It guides operations and
administration, ethics, risk
management, compliance, etc.
PARTIES INVOLVED IN
ORGANIZATIONAL GOVERNNACE

STAKEHOLDERS EXECUTORS

-Who care about the -Who perform work

content and results related to
of a company's governance
governance
Roles and
Functions
 Role
The CEO is at the top of the chain
and elected by the board and its
shareholders.
Function
- make high-level decisions concerning
policy and strategy.

- managing the overall operations and

resources of a company

- the main point of communication between

the board of directors (the board) and
corporate operations
 Role
The COO is the right hand of the
CEO.

Function
-in charge of the day-to-day
administration and operation of the
business.
-often handles a company's internal
affairs
 Role
also known as the Financial Director, is
in charge of the economic and the
financial actions of a company.
Function
- tracking cash flow and financial
planning analyzing the company's
financial strengths and weaknesses and
proposing corrective actions
- Managing the processes for financial
forecasting and budgets, and Special Considerations
overseeing the preparation of all - must report accurate
financial reporting information
- Advising on long-term business and - adhere to generally
financial planning accepted accounting
-Oversee taxation issues principles (GAAP)
 Role
a.k.a Information Technology Director
looks after the systems of the company
that are related to information
technology at the process level and
from the point of view of planning.

Function
- assessing current processes,
- recommending software upgrades,
- directing the executive team on the
best processes.
 Role
The CCO is responsible for overseeing
the development and commercial
strategies of a company

Function
- manage company brand and
reputation
- Create and launch press releases and
marketing campaigns.
- Develop branding initiatives, internal
communications and external media
relations.
 Role
The CRO leads efforts to reduce business
risks that can put an organization's
profitability and productivity at risk.

Function
- implementing and supervising policies CRO
and procedures to minimize or manage
operational risks. Chief Risk
- Creating and disseminating risk analysis Officer
reports and progress reports to different
stakeholders, including employees, board
members, and C-suite executive
- Evaluating possible operational risks that
may arise from human error or system
failures
 Role
The CMO is responsible for marketing
activities, which include sales
management, product development,
advertising, market research and
customer service.

Function
- Set marketing goals and objectives
- Plan, implement and manage marketing
strategy
- Market research, pricing, product
marketing, marketing communications,
 Role
The CHRO is responsible for developing and
executing human resource strategy in support of
the overall business plan and strategic direction of
the organization

CHRO
Chief Human
Resource
Function
- Crafting talent acquisition strategies to build
Officer
strong pipelines for future hiring needs
- Formulating career development plans
- Promoting inclusion in the workplace and
reinforcing our position as an equal opportunity
employer
POLICIES AND PROCEDURES

The board of directors allocates the

responsibility and accountability for
delivering such concerns to the CEO. The
CEO then basically communicates the
employees; sets targets through the line
through the chain of command and
people then implement that.

Commonly what most organizations do is

create policies and then they link them
into series of procedures that deal with
the execution of the tasks to implement
the policies..
THE ROLE OF PROCEDURES
strategic alignment
ensuring the objectives and
goals of the organization
increase consistency reduce risk of bad decision
of decisions policies guide decisions where to
making sure that everybody have alternatives responds and
makes decisions that fit reactions to prevent managers and
with each other other staffs/people under pressure
making bad decision.
THE ROLE OF PROCEDURES

"how to guides" narrative description reduce errors by consistent

the procedure is your how- of the activity steps standard execution
to guide to walk throught ensuring the objectives and helps us to do things in a better
that policy and implement goals of the organization more consistent manner
it
 Good management principles often
suggest that organizations need written
governance documents. These written
rules also play an important role in
managing legal, regulatory, and
P O L I C I E S
A N D cybersecurity risks. At times, these so-
P R O C E D U R E S called “unwritten policies” can be
problematic.
 Needs for policy documents will extend beyond
organization's policy, and important areas may include·

Anti-fraud and anti-money laundering practices (in certain sectors)

Human resource issues including hiring, firing, workplace conduct, anti-

discrimination, and more.

Organizations in the non-profit sector probably should have policies on

whistleblowers, document retention, conflicts of interest, and more. It is
good governance, and they may need to answer questions on their
annual filings about whether they have these policies or not.
REMEMBER:

1 External Rules 2 Internal Rules

External rules and requirements Internal rules created by the

based upon applicable laws organization and put into
and regulations, contracts, and writing, such as policies,
other legal requirements standards, and procedures
The audit committee

EXTERNAL AUDITING
provides indepent assurance on the financial statement preperation and
reporting activities in accordance with applicable regulations and
accounting principles
 INTERNAL AUDITING

to provide
assurance that provides advice on facilitates or
governance potential provokes
structures and improvements to significant change
processes are governance or action for the
properly designed structures and company/organizat
and operating processes ion
effectively

ASSESSOR ADVISOR CATALYST

STANDARD 2130
IA should assess and make recommendations for improving the
governance process:

-Effective coordinating
- Effective of activities &
-Ensuring effective
-Promoting appropriate communication of risk & communication
performance
ethics & values control information between Board, External
management
Auditors, Internal
Auditors & Management
 SPECIFIC INTERNAL
AUDITING ACTIVITIES
Consider assessing the following

Board Structure, Objectives, and Dynamics

Board Committee Functions
The Board Policy Manual
Processes for Maintaining Awareness of Governance
Requirements
 SPECIFIC INTERNAL
AUDITING ACTIVITIES
(Continued) Consider assessing the following

Recruitment Processes for Senior Management and Board

Members
Employee Training
Governance Self-assessments
Comparison with Governance Codes or Best Practices
External Communications
Oversight of External Audit
I N T E R N A L A U D I T I N G

OTHER CONSIDERATIONS

Governance is changing Internal auditing must

rapidly and requires the assess the "big picture" of
internal auditor to monitor governance
these changes and evaluate
how they impact the role of
internal auditing in the
future.
 Governance
and Ethics of
the Accounting
and Finance
Function
Overview
- The core function of
accounting tasks is to
track the company's
financial performance,
therefore it affects
how companies &
organizations fulfills
governance
ETHICS - A distinguishing mark of the accountancy
profession is its acceptance of the
responsibility to act in the public interest.
Therefore, a professional accountant’s
responsibility is not exclusively to satisfy the
needs of an individual client or employer.

- The International Ethics Standards Board for

Accountants, created a code outlining the
principles at play in ethical accounting. These
principles cover many facets of ethical
behavior for accountants which also applies in
finance, although unique situations may call
for judgment calls that aren't explicitly
reflected in these principles.
 Code of ethics

Integrity Objectivity Competence

– to be - to not allow bias, - to maintain professional

knowledge and skill at the level
straightforward conflict of interest or required to ensure that a client
and honest in all undue influence of or employer receives competent
professional services based on
professional and others to override current developments in
business professional or practice, legislation and
techniques and act diligently
relationships. business judgments. and in accordance with
applicable technical and
professional standards.
 Code of ethics

Confidentiality Professional behavior

- Accountants handle
- To perform work
sensitive information, and
in accordance with
they are morally obligated
the standards set
to make sure this
by their profession.
information isn't shared
with anyone who doesn't
have the right to see it.
Questions
1. What are the three primary features that is present in the definition of
organization?
2. The origin of the word governance.
3. These are the two groups of people who are responsible, accountable, consume
and informed about governance?
4. What principle that requires accountants to be straightforward and honest in all
professional and business relationships?
5. Who created a code outlining the principles at play in ethical accounting?
6. Why do you think that verbal rules and unwritten policies can be problematic?
7. Do you think that there are disadvantages or negative effects when one has a
policy? Why?
8. Give at least 3 aspects of an Internal Auditor should assess.
9. Give the name of the executive officer whose function is managing the overall
operations and resources of a company.
10. What special consideration must be noted for the CFO? Give one
References
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McMenemy, L. (2019, June). What is Organizational Governance? Retrieved from https://insights.diligent.com/entity-
governance/organizational-governance
Tamayao, M. (2014, August). What is Governance? Retrieved from https://tamayaosbc.wordpress.com/2014/08/21/what-
is-governance/
What is an Organization? (n.d.). Retrieved from https://2012books.lardbucket.org/books/an-introduction-to-
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The International Ethics Standards Board for Accountants. (2018). IESBA Code of Ethics for Professional
Accountants. Iesbaecode.Org. https://www.iesbaecode.org/
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https://smallbusiness.chron.com/role-accounting-corporate-governance-73557.html
Gartenstein, D. (2019, February 11). Definition of Ethics in Accounting. Bizfluent. https://bizfluent.com/about-
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