The importance of governance, risk and compliance in Shifting Business Culture

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Organizations are facing new challenges management of market, financial and regulatory uncertainty in the current economic crisis. On the market front, there are new competitors drive pricing pressure. Companies need to move to unfamiliar markets and technologies. Find new markets, especially in the Emerging World, requires the development of new skills that are not always available. In the financial front, the shareholders are more challenging when dealing with market volatility. The global credit crunch was the main concern in this area since 2008. In addition, the worsening fiscal conditions create cost increases and difficulties in optimizing profitability. In the regulatory front, many proposals law involves planning as companies see the structural changes. There are difficulties in controlling the risk of expansion of the role of government in key sectors of the economy.

Seeing the potential impact of these new challenges in business is time consuming and often frustrating task for its leaders. Continued improvement culture helps companies to assume new risks and respond proactively to maximize financial profit. Companies are devoting more and more resources to prevention and preparedness to deal more effectively with the range of new dangers. The positive early intelligence business is forecast to see new risks is also forecast to find new opportunities. It also helps to deal better with the complex international relations and to deal with unforeseen crises.

Proper management of Governance, Risk and Compliance framework will identify strategies to deal with these challenges. Companies are strengthening their governance processes and risk culture reinvigorated procedure risk and more upper management participation. According to Business Risk Report 2010, issued by E & Y, 59% of international companies are addressing these challenges through risk management function. More than 70% of the surveyed companies in the financial areas reported strong risk management function is effective to address compliance or regulatory threats.

Other companies are using different strategies, including investing in government relations capacity, upgrade compliance, investing in it to support new rules, adding their own capabilities for rapid implementation requirements, focusing on the key compliance issues, and increasing compliance focused external partners, as well as, suppliers and customers.

The main difference between success and underperformance comes from the ability of a Governance, Risk and Compliance program is executed. It is not a bad program, but the execution of programs. The Governance, Risk and Compliance area is moving business out of a retrospective analysis of business decisions go wrong seeing new risks in a challenging world.

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