Enterprise Governance

Topics: Corporate governance, Board of directors, Management Pages: 11 (3926 words) Published: December 6, 2012
Enterprise Governance
Enterprise Governance involves both corporate governance and the business managements inside an organization. There are huge challenges and opportunities under enterprise governance that it actually links with the performance of good corporate governance that move the business forward. Enterprise governance considers the big picture that guides good management to align with good strategic goals, more about achievement at the end. Same as corporate governance, enterprise governance has various definition but all are merely the same.

The figure above illustrates enterprise governance. The two dimension of enterprise governance are the conformance and performance. The conformance tells the accountability and assurance story of the corporate while performance put emphasis on value creation and resource utilization. However, both conformance and performance can sometime feed towards the cross dimensions. So the conformance is about logic and analysis functions where the performance is about universe and creative. (CIMA and IFAC 2012)

The conformance for enterprise governance is watched in recent years due to several corporate scandal issues. Conformance is also can be understood as corporate governance (refer to Appendix 3: Corporate Governance). It mainly covers the following issues as according to CIMA. * the roles of the chairman and CEO

* non-executive directors
* audit committee
* remuneration committee
* risk management
* internal audit
Codes and standards are generally the literatures that continue to develop in these areas, subject to a better assurance. It involves the role of professional accountant within the business that is meant to control and ensure the highest accountability where internal audit assist in assurance of the control of accounts to enhance effectiveness. External audit always gives a clearer pictures to shareholders, providing a true and accurate financial statement and present to the board. The jobs are separated where external auditors have less involvement in the corporate, unless for the purpose of auditing accounting only. (CIMA and IFAC 2012)

Role of Chairman & CEO
Chairman is responsible for management and development to procure effective performance of the Board of Directors. Providing supervision leaderships are the main job and the main thing in the Board. Chairman also acts as advisor in a corporate to provide useful information or knowledge to President or CEO before making decisions. It is also chairman’s flavor to advise other officers regarding to any matters that are related to the management or interest of the corporate. Chairman takes the role of the corporate’s external relationships. Generally, a chairman is expected to plan and carry out all activities of the Board includes preparation of Board meetings, formation of Board committee, development of the Board, communicate among directors whether formally or informally and perhaps to evaluate Board’s performance and propose improvement. (Iod 2010) For Chief Executive Officer, also known as CEO position is much similar to a managing director. The role is to be responsible for the day-to-day management within an organization. Board gives directions regarding to the corporate’s objectives and CEO is the one will implement to make sure objectives are met. Generally, the role of CEO is to ensure executive team implements the policies and strategies from the Board, update the Chairman with complex issues that will affect corporate performance, to encourage a fluency and frequent communication with the chairman, to monitor the performance results and take immediate actions to ensure objectives and standards are in place, to lead the management team and employees and generally manage the corporate (MAICSA 2012). Non-Executive Directors

Non-executive directors, also known as NED is essential to provide creative contribution to the board through objective criticism...

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CIMA and IFAC (2012) Enterprise Governance Getting the Balance Right. International Federation of Accountants, Available at: http://www.cimaglobal.com/Documents/ImportedDocuments/tech_execsum_enterprise_governance_0804.pdf.
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Cadbury: "the whole system of controls, both financial and otherwise, by which a company is directed and controlled." (Cadbury 1992)
OECD: "A set of relationships between a company’s board, its shareholders and other stakeholders
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