Governance Structure Policy Template

Introduction

Governance Structure Policy outlines the framework for governance within the company, detailing the roles, responsibilities, decision-making processes, and oversight mechanisms essential for maintaining effective internal controls, managing risks, and ensuring compliance. Serving as a foundational element of a strong control environment, this policy supports the company in achieving its strategic objectives, meeting regulatory requirements, and upholding ethical standards.

Scope Of Governance Structure Policy Template

This policy applies broadly across all levels of the organization, including the Board of Directors (BoD), executive leadership, department heads, and all employees. It provides a comprehensive framework for the organization, covering key areas such as strategic oversight, operational controls, risk management, compliance, financial governance, and decision-making authority. By defining clear guidelines, this policy seeks to ensure accountability and effective oversight at every level, fostering a unified approach to operations and maintaining organizational integrity.

Roles And Responsibilities In Governance Structure Policy Template

1. Board of Directors (BoD) - The Board of Directors (BoD) holds ultimate accountability for overseeing governance, internal controls, and risk management. Its primary duties include:

• Defining the organization’s long-term strategic objectives and approving essential policies.

• Evaluating executive management’s performance in executing the strategic plan.

• Ensuring robust internal controls, effective risk management systems, and regulatory compliance.

• Supervising financial performance, including approving budgets, investments, and significant business decisions.

• Establishing committees, such as the Audit Committee, to focus on specific governance, risk, and control areas.

• Designing and maintaining an effective internal control system.

• Fostering a culture of integrity and ethical behaviour throughout the organization.

• Ensuring compliance with policies, procedures, risk management, and regulatory frameworks.

• Providing regular reports to the BoD on operational, financial, and compliance performance, along with updates on internal controls.

• Reviewing financial statements and internal audit findings.

• Supervising internal and external audit activities while ensuring regulatory compliance.

• Assessing the efficiency of risk management practices and internal controls.

• Developing and implementing risk management policies and identifying organizational risks.

• Ensuring compliance with legal obligations and internal protocols.

• Reporting significant risk and compliance issues to the Audit Committee and BoD.

• Identifying and managing risks specific to their operational areas and ensuring adequate controls are in place.

• Enforcing organizational policies and ensuring departmental activities align with internal standards.

• Reporting deficiencies in controls and risk exposures to executive management and the Risk and Compliance Officer.

• Complying with organizational policies and procedures.

• Reporting breaches of controls or unethical behavior through established channels, such as the Whistleblower Policy.

• Participating in mandatory training programs on governance, compliance, and risk management.

Understanding Internal Controls Oversight In Governance Structure Policy Template

Internal controls are essential for the effective governance of the organization. Oversight is provided through:

1. Internal Audit Function: The Internal Audit Function operates as an independent body tasked with assessing and ensuring the effectiveness of the organization’s internal controls. It conducts comprehensive evaluations to identify areas requiring improvement and potential risks, with its findings reported directly to the Audit Committee. This process keeps management and stakeholders informed about the state of the control environment and any required enhancements.

2. Control Self-Assessment (CSA): Control Self-Assessment (CSA) is a proactive method where department leaders periodically review and assess the effectiveness of the internal controls within their respective areas. By systematically identifying weaknesses or gaps, documenting their observations, and implementing corrective measures, they strengthen control systems. This practice promotes a culture of responsibility and continuous organizational improvement.

3. Regular Reporting: To uphold transparency and support well-informed decision-making, the outcomes of internal control evaluations are routinely shared with executive management, the Audit Committee, and the Board of Directors (BoD). These reports deliver detailed insights into the effectiveness of internal controls, emphasize critical findings, and recommend necessary actions, ensuring that key stakeholders actively participate in overseeing the organization’s control systems.

Conclusion

The Governance Structure Policy serves as a foundational document that outlines the framework for effective governance within the organization. By clearly defining roles, responsibilities, and oversight mechanisms, the policy ensures accountability and alignment with the organization’s strategic objectives, regulatory obligations, and ethical standards.