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
