Internal Governance

From Open Risk Manual

Definition

Internal Governance of a firm in the context of Risk Management is the formal (that means: explicit, written, agreed between all involved parties) set of structures, communication lines, procedures and rules. Also Risk Governance

Components

The components of internal governance are

  • The organisational structure as defined e.g., in organizational charts
  • The lines of responsibility as defined in job descriptions
  • The Risk Management processes as specified in internal policies and rules
  • Internal control mechanisms as established by Risk Management and Internal Audit functions
  • Remuneration policies and in particular the incentives created by those

Objectives

Issues and Challenges

See Also