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King IV Report and Corporate governance - Coggle Diagram
King IV Report and Corporate governance
Principle 11:
Risk governance
The governing body should govern risk in a way that supports organization in setting and achieving its strategic objectives
Recommended practices 1 - 3
Governing body to assume risk responsibility for risk governance by designing guidelines for approaching and addressing. Risk governance should entail:
a) Opportunities and associated risks considered when developing strategy
b) Positive and negative potential risk effects on organization objectives
The governing body should govern risk in a way that supports organization in setting and achieving its strategic objectives
Policy to be approved by governing body which articulates and gives effect to its view on risk
Recommended practices 4 - 6
Governing body to evaluate and agree on nature and extent of risk organization should take to achieve strategic objectives. Should approve:
a) Organization risk appetite
b) Limit of potential loss allowable
Governing body to delegate to management the responsibility to implement and execute effective risk management
Governing body to exercise continuous oversight and see that the following is achieved:
a) Assessment of risks and opportunities coming from triple context business operates in
b) Assessment of potential upsides, opportunities presented by risks with seeming negative effects
c) Assessment of organization dependence on resources and relationships in form of capital
d) Design and implementation of various risk responses
e) Establish and implement business continuity arrangements in spite of volatility
f) Integration and embedding of risk management in operations
Recommended practices 7 - 9
Governing body should opt to receive periodic independent assurance on risk management effectiveness
Extent and nature of risks and opportunities that organization is willing to take should be sensitively disclosed
Disclose following in addition to risk:
a) Arrangements for governing and managing risk
b) Key areas of focus during reporting: objectives; risks; undue or unexpected risks; risks above tolerance level
c) Monitoring of risk management and outcome measurement
d) Planned areas to focus on in future