Comments on: Fifteen Risk Factors for Poor Governance http://www.directorship.com/fifteen-risk-factors-for-poor-governance/ Boardroom Intelligence Tue, 07 Feb 2012 09:48:26 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Matt Skitzki http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-4399 Matt Skitzki Tue, 04 May 2010 02:38:13 +0000 http://www.directorship.com/?p=9938#comment-4399 Great article. Prevention is the most efficient method for solving so many problems, in physical health and the board room! I appreciate your scientific approach. Keep up the good work! Great article. Prevention is the most efficient method for solving so many problems, in physical health and the board room! I appreciate your scientific approach. Keep up the good work!

]]> By: Robert Lane http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-806 Robert Lane Tue, 06 Oct 2009 13:43:40 +0000 http://www.directorship.com/?p=9938#comment-806 Thank you for this thoughtful article. Great insights. In terms of executive management compensation, a key component should be risk based. Specifically, if an executive officer's area is experiencing noteworthy internal control and risk management deficiencies, this should be reflected in his/her compensation, particularly as it relates to bonuses. While most organizations tout the importance of effective risk oversight, many do not follow-up in terms of management accountability. Performance management is a great place to emphasize and follow through on this. Robert Lane Lane Risk Consulting, LLC Thank you for this thoughtful article. Great insights. In terms of executive management compensation, a key component should be risk based. Specifically, if an executive officer’s area is experiencing noteworthy internal control and risk management deficiencies, this should be reflected in his/her compensation, particularly as it relates to bonuses. While most organizations tout the importance of effective risk oversight, many do not follow-up in terms of management accountability. Performance management is a great place to emphasize and follow through on this.

Robert Lane
Lane Risk Consulting, LLC

]]> By: Norman Marks http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-753 Norman Marks Thu, 24 Sep 2009 21:48:03 +0000 http://www.directorship.com/?p=9938#comment-753 Walter, I suggest that these may be useful for outsiders assessing an organization's governance. But I would look to others if I was on the board or in executive management. They might include, off the top of my head: 1. There is no internal audit department, it does not functionally report to the board or audit committee, is under-resourced, or is not led by an expert in the professional practice of internal auditing. 2. The internal audit department does not provide a formal assessment of the adequacy of governance, risk management, and related internal controls. 3. The board does not actively question management, but has a more collegial style. 4. The board does not have a mix of individuals with related business, technical, and other appropriate skills to provide effective oversight. 5. The general counsel is not a direct report to the CEO. 6. The board members do not spend time with business executives below the CEO and CFO, to understand how the business really operates. 7. The board is not actively involved in risk oversight, including approving risk tolerances and appetite. 8. The CEO and executive team receive bonuses or stock-related awards even when the company's performance is poor, or even when other employees are not receiving pay increases or bonuses. 9. The IT landscape is scattered with systems that don't talk to each other, with no plans to bring them together and enable enterprise-wide performance and risk management. 10. The company has a poor relationship with the analysts and the press. ...and the list goes on Walter, I suggest that these may be useful for outsiders assessing an organization’s governance. But I would look to others if I was on the board or in executive management. They might include, off the top of my head:

1. There is no internal audit department, it does not functionally report to the board or audit committee, is under-resourced, or is not led by an expert in the professional practice of internal auditing.

2. The internal audit department does not provide a formal assessment of the adequacy of governance, risk management, and related internal controls.

3. The board does not actively question management, but has a more collegial style.

4. The board does not have a mix of individuals with related business, technical, and other appropriate skills to provide effective oversight.

5. The general counsel is not a direct report to the CEO.

6. The board members do not spend time with business executives below the CEO and CFO, to understand how the business really operates.

7. The board is not actively involved in risk oversight, including approving risk tolerances and appetite.

8. The CEO and executive team receive bonuses or stock-related awards even when the company’s performance is poor, or even when other employees are not receiving pay increases or bonuses.

9. The IT landscape is scattered with systems that don’t talk to each other, with no plans to bring them together and enable enterprise-wide performance and risk management.

10. The company has a poor relationship with the analysts and the press.

…and the list goes on

]]> By: Mark Weber http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-746 Mark Weber Wed, 23 Sep 2009 23:38:45 +0000 http://www.directorship.com/?p=9938#comment-746 Fascinating assessment model...your approach seems to have great merit and the subject matter is particularly relevant in today's business world. Mark Weber Managing Partner DARTON GROUP www.dartongroup.com Fascinating assessment model…your approach seems to have great merit and the subject matter is particularly relevant in today’s business world.

Mark Weber
Managing Partner
DARTON GROUP
http://www.dartongroup.com

]]> By: Holly Gregory http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-738 Holly Gregory Mon, 21 Sep 2009 20:13:19 +0000 http://www.directorship.com/?p=9938#comment-738 much valuable learning here excellent article with real world application thanks much valuable learning here

excellent article with real world application

thanks

]]> By: Craig Linsday http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-715 Craig Linsday Mon, 14 Sep 2009 22:22:42 +0000 http://www.directorship.com/?p=9938#comment-715 Walter, thank you for sharing your thought leadership concerning governance and risk metrics. While reading your article, it was good to be reminded that the flags/metrics identified by Audit Integrity are important to be identified and subsequently socialized with key stakeholders. Many of the flags identified by you have been directly witnessed by me and are associated with problem institutions. Walter, thank you for sharing your thought leadership concerning governance and risk metrics. While reading your article, it was good to be reminded that the flags/metrics identified by Audit Integrity are important to be identified and subsequently socialized with key stakeholders. Many of the flags identified by you have been directly witnessed by me and are associated with problem institutions.

]]> By: Susan Smith http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-698 Susan Smith Thu, 10 Sep 2009 12:59:18 +0000 http://www.directorship.com/?p=9938#comment-698 Good article and excellent information. I am sure this RBC metrics will be valuable to Board Members and Shareholder wanting a better understanding of their organizations health from an governance perspective. A book called, 'Financial Shenanigans', by Howard Schilit, touches on similar points you mentioned above, albiet at a more granular acounting perspective. Nicely done. Susan Smith President & CEO iSwarm Good article and excellent information. I am sure this RBC metrics will be valuable to Board Members and Shareholder wanting a better understanding of their organizations health from an governance perspective.

A book called, ‘Financial Shenanigans’, by Howard Schilit, touches on similar points you mentioned above, albiet at a more granular acounting perspective.

Nicely done.

Susan Smith
President & CEO
iSwarm

]]> By: Joe Zgrabik http://www.directorship.com/fifteen-risk-factors-for-poor-governance/comment-page-1/#comment-697 Joe Zgrabik Thu, 10 Sep 2009 12:24:58 +0000 http://www.directorship.com/?p=9938#comment-697 Boy! If some of these top companies would put these principals into practice on a continued basis we would see the economy take a giant step forward in with their decisions alone. Boy! If some of these top companies would put these principals into practice on a continued basis we would see the economy take a giant step forward in with their decisions alone.

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