Why is strategic planning, governance and risk management important?
In addition to developing the right strategy, the business must be able to execute through good governance processes. Without good governance, an organisation lacks the systems to ensure accuracy, consistency and responsiveness to key stakeholders including customers, shareholders and regulators.
In a large business, the board will likely have a management team who are charged with ensuring the enterprise adheres to the principles of good corporate governance. Whilst a small business may have a simple governance structure, small businesses must also ensure they have good governance in place. This can be achieved through clear lines of authority, so that staff understand which decisions they can and can’t make on their own. It’s also important to develop clear and concise policies and procedures to manage employees and ensure accountability allowing you to focus on other core management activities that can help make your business a success.
Regardless of the size of your organisation, good corporate governance is good for your business because it encourages good decision making, helps manage risk and encourages management to seek advice when required. All companies, regardless of their size or complexity can achieve tangible benefits from implementing strong governance systems.
What contributes to good governance and risk?Any organisation can develop good governance practices. The key is to understand the foundations of good governance and how these will apply to your company.
The following key elements should be considered:
1. Strategic and operational planning
2. Delegations of authority
3. Conflicts of interest
4. Key policies, procedures and guidelines
5. Roles and responsibilities
6. Risk identification, assessment and response
7. Social and environmental obligations
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