What Is Organizational or Corporate Governance?
The international standard on social responsibility, ISO 26000, defines organizational governance as “a system by which an organization makes and implements decisions in pursuit of its objectives.” Governance systems include the management processes designed to deliver on performance objectives while considering stakeholder interests.
In “Corporate Governance and Risk Management,” the Global Association of Risk Professionals (GARP) highlights the importance of concepts such as credibility, transparency, and accountability in establishing effective governance. Corporate governance is, GARP notes, “doing the right things for the organization and doing things the right way independent of personal interests.”
In this context, “organization” can refer to many different types of groups. For example, a business, an institution, a professional society such as ASQ, and even a family may be considered an organization. Governance is applicable in these types of organizations.
While governance starts at the top, different structures have to exist to ensure that decisions and accountabilities are carried throughout the enterprise or organization.
Governance, Risk, and Compliance (GRC)
Governance, risk, and compliance (GRC) are increasingly being treated as three parts of a single integrated framework with the purpose of providing a holistic view of organizational performance.
Business risks need to be identified, measured, mitigated, and controlled within the context of a management system. Compliance refers to the scope of regulations, legal requirements, industry standards, and business rules to which organizations must not only adhere and abide, but must demonstrate fulfillment.
As GRC management systems increase robustness, they can add business value to organizations by improving operational decision making and strategic planning. By incorporating GRC considerations into a social responsibility management system, the organization can more effectively manage its social responsibility influence.
Recommended Corporate Governance Resources
- Governance as a Form of Social Responsibility (ASQ member exclusive), Journal for Quality and Participation, October 2009
- A Frame of Reference for Research of Integrated Governance, Risk and Compliance (GRC), Communications and Multimedia Security, 11th IFIP TC 6/TC 11 International Conference, CMS 2010 Proceedings
Books, primers, and guides
- Key Concepts in Corporate Social Responsibility
- A Handbook of Corporate Governance and Social Responsibility
- Managing Responsibly: Alternative Approaches to Corporate Management and Governance
- Governance and Social Responsibility: International Perspectives