The primary aims of governance and compliance are to improve internal controls, streamline business processes, increase transparency with stakeholder, meet regulations, and manage risk.
Both corporate governance and company compliance are a set of laws and policies that help businesses to achieve governance and compliance objectives. For both, robust internal controls underpin the efficiency, effectiveness, and ethical behaviour of an organisation.
Governance can be broad, encompassing the entire organisational practices and is generally overseen by a board that manages risk, among others. Compliance is narrower, focusing mostly on specific legal and regulatory processes and is typically managed by risk or compliance managers.
The cost of poor governance and compliance can expose an organisation to significant legal and regulatory risks through violation of laws or ethical standards, resulting in lawsuits, fines, sanctions, or investigations. It can also lead to loss of investor, stakeholder, client and key supplier confidence, as well as losing key employees.
In local government, it opens the door to corruption and misuse of public funds which ultimately leads to poor or negligible service delivery.
There are differences between governance and compliances but the impact of being loose or tardy on either can have a damaging impact on both the organisation and its stakeholders.
Nico de Kock
MD Mubesko Africa
nico@mubesko.co.za
mubesko.co.za
Mubesko Africa offers expert support through its Financial Accounting and Management Support, Forensic Services and Asset Management and Modelling services, ensuring governance and compliance. Several South African municipalities which achieve clean audits are valued clients of Mubesko Africa.