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King IV Report on Corporate Governance (Recommended practices regarding…
King IV Report on Corporate Governance
Defines risk as uncertainty, likelihood and effect of a certain event.
Recognizes the upside of risk which is balanced compared to the traditional negative view.
Encourages risk committee's due to the rising complexity of risks
Recommended practices regarding risk
Risk governance should encompass
a. opportunities and risks
positive and negative effects
Treat risk as integral
Governing body should set risk direction
Governing body should evaluate and approve
a.risk appetite
b. Limit of potential loss
Delegate responsibilities for effective risk management
Should exercise ongoing risk management oversight
Should be disclosed:
a. Overview of arrangements of governing and managing risk
Key areas of risk focus
Actions taken for monitoring risk management
Planned areas of future focus
Councils should govern risks in a way that supports municipalities/ organisations in setting and achieving its strategic objectives
Boards should govern risk in a way that supports funds/ companies in setting and achieving its strategic objectives
The accounting authorities should govern risk in a way that supports the State-Owned Enterprise in setting and achieving its objectives