Organizational Governance, Policies, and Risk Management
This chapter is a detailed version of the topics we briefly touched on in Chapter 1. As we learned in Chapter 1, the purpose of an organization is to create value for the stakeholders, shareholders, and customers. This is achieved by aligning the enterprise’s mission, objectives, and strategy. Similarly, organizational structures and leadership are required to establish objectives that support their mission and satisfy stakeholders and customers. The board of directors establishes the strategy and the enterprise derives its principles from this plan.
Organizational leaders support the enterprise’s objectives and decision-making by evaluating the risk and benefits associated with specific investments. Senior managers identify the capabilities that contribute value to the organization’s strategy.
This is then translated into policies, standards, and procedures, which are essential to putting the objectives...