Introduction
A perfect corporate authority enables the board of management of an organization to meet frequently, take control of the business and have well-defined responsibilities. It also ensures that proper risk management is taken into account. Corporate governance is one of the strengths of good companies. Corporate governance ensures appropriate decision-making through policies, processes and practices. It also provides a way of defence against accusations of malpractice in the line of duty.
2.1. Significance of corporate governance to the strategic performance of a banking organization.
Corporate governance consists of many tasks that vary according to an organization. Good corporate governance is important for a banking organization to run it successfully. Given a competitive global economy and pressures, corporate governance is essential in banking to lower the risk of non-compliance with regulatory obligations. It helps the organization to discourage assumptions that are open-minded. Proper corporate governance policies can result in corporate diversity, appropriate supply chains and other results valued by the investors. Corporate governance is therefore considered an essential business differentiator.
Good corporate governance leaves some hallmarks in the organization. The board should frequently meet to maintain proper control over the business. Minutes of the meetings should be thorough and show constructive challenges from a diverse board with a balance of executive and non-executive directors (Rehman and Anwar, 2019). The chairperson should not be a dictator but a facilitator. The directors must go through induction into their responsibilities and understand the nature of the business. Once the installation is complete, the managers should be given ongoing training and assessments that should be monitored so that the board can understand the company’s functions. The board and committee should be regularly evaluated to ensure they are well functioning. Senior leaders should ensure effective communication with the board and maintain their records. Corporate policies must be implemented across the entire banking organization.
The board is fully responsible for developing, implementing and maintaining a good corporate governance system. The chairperson and the secretary must ensure that the board remains true to its governance. They should ensure that the board adopts the banking organization’s governance code with local differences grounded on regulations, cultures and other factors. The human resource, finance, procurement and legal counsel have major responsibilities in ensuring good governance. Good governance promotes accountable decision-making at all business levels. Any new person in the organization should understand their responsibilities and what is expected of them.
2.2. Effectiveness of a corporate banking structure using a board portal.
The board portal is a suitable corporate governance tool used to evaluate the banking organization’s effectiveness. Strong corporate governance helps establish clear accountability and use proper objectives and processes throughout the organization. Lack of strong corporate governance leads to companies having a state of flux, unable to achieve the set goals (Altanashat, Al Dubai and Alhety, 2019). The objective-setting process may be considered invalid. Board portals help make boards effective and the board members accountable. It allows the banking organization to set objectives and measure the outcomes.
Using board portals, instant board backs are provided and can be used by the board wherever they are. Instant board packs help the banking organization to reduce courier costs and protect confidential data. It reduces the cost of board members attending meetings physically. Instead, the sessions are done online. The board packs enable business operations to be more flexible.
Board portals can help achieve huge gains in efficiency. This happens when the team members only access the documents they need to, which helps secure the records. Personal assistants benefit a lot from efficiency gains. The agendas are put together and distributed numerically. Board associates can be invited and informed of the conferences, and their feedback can be received digitally. Board meetings can be reserved and stored online. A move to a paperless method of taking minutes brings a tremendous efficiency gain.
Accountability is achieved when collaboration is made, and the board members and internal teams are made to take responsibility for any action in the banking organization. The documents accessed by the board members are period imprinted and registered so that pure records are made when there are changes. The audit trail gives details on all the activities taking place in the organization. The audit trajectory guarantees that everybody can assess and review the documents they have been authorized to access.
Board portals help in adhering to the regulations. In safeguarding private data, board portals provide the benefit of stronger accountability, good efficiency gains and a better understanding of risks. In terms of risk management, board portals provide a hazard management software program assembled into them. This aids board members in achieving the dangers of data being lost or deleted. It is useful for risk managers to show the risks and get views from the employees at all levels.
3.1. The project success rate
The overall project success rate is rated according to the time taken for completion, budget and agreement to the shareholder’s fulfilment. Productivity, functionality and absenteeism of entitlements and court records are the measures of success. A united workforce, experience in various fields in the banking organization, and timely and valuable information are the contributors to success (Fraser, Quail and Simkins, 2019). The success factors are planning effort, team motivation, goal-oriented workforce, ability to manage technicalities, control systems, work definition and scope.
3.2. Risks associated with the project lifecycle and the suitable risk responses.
In the initiation phase, the risks are associated with things that are not known. The chances are weighed against the potential benefits made for the banking organization’s success. When the project has been approved, it proceeds to the planning phase, where risks are known with the respective group of events. A risk interruption structure can be used to find out the cumulative risk analysis points. As the project advances, additional information is accessible to the project team. Risks on the project decrease and actions are taken without any loss. The risk plan has to be rationalized with the newest information and risks checked related to the activities that have been done. Risk-sharing and transfer arrangements are determined at the closeout phase, and the risk breakdown structure is. This ensures that the risk events have been evaded. The final estimation of loss due to risk can be completed and documented for the project documentation.
Adequacy of the banking organization’s control environment and measures for its improvement.
A controlled environment combines the banking organizational structure, processes, policies, and standards used to uphold managerial control. The banking organization’s board of directors and executive management create the culture and attitude of maintaining rules and setting the prospects of ethical behaviour. A controlled environment helps to achieve the aims that have been placed in a banking organization. It offers an accurate financial report to all the shareholders. It also helps in agreement with the rules and regulations.
There are numerous essentials of the control environment, including Indicating an obligation to truth and ethical principles and upholding the liberation of the board of directors from administration and their management of internal control and creating an organizational structure, reporting outlines, expert witnesses, and tasks to follow corporate aims (Shad et al., 2019). Demonstrating an obligation to entice, grow, and preserve capable persons, maintaining responsibility for accomplishing internal control tasks.
Failure to have internal controls of an association results in many outrages they don’t want to be associated with. A robust internal control setting offers management and shareholders a sensible guarantee that the banking organization is functioning according to corporation guidelines, business ethics, and supervisory necessities.
The components of internal control setting are; Control environment, a set of ethics, structures, and procedures that offer the basis for executing internal control in the organization. Risk Assessment is a method used to classify, evaluate, and accomplish risks to accomplish the organization’s purposes. Control actions are executed under the course of administration, as absorbed by an organization’s guidelines and measures, to alleviate the risks to attaining the organization’s aims. Information and communication is the dispersal of data desired to accomplish control activities and to comprehend internal control tasks to all the people. When executing internal control, the command of actions is taken into account. To progress the banking organization control environment, the following should be well-thought-out; Evaluate the risks intimidating the organization’s capability to attain its business purpose obligations. These may be personalities through a prescribed risk assessment or from monitoring control activities accomplished by the organization. Find new controls or how to adapt prevailing control actions to alleviate the risks. Design and communicate control variations to personnel accountable for applying, accomplishing, or revising the associated events. Implement the control deviations. Monitor control events all over the organization to limit the efficiency of their actions and the results from their accomplishment.
5.1. Risk management tool
Risk management is the understanding and analysis of risks to ensure that the banking organization meets its goals in the corporate world. A risk register is used to evaluate the banking organization’s risk management. A risk register is a tool used in project and risk management. It is used to identify potential risks that an organization may face to fulfil regulatory compliance and to be ahead in terms of encountering potential issues and outcomes.
5.2. Recommendations for improvement of risk management
To improve risk management, there should be a clear remit. Any gaps in terms of responsibilities in a banking organization show a greater opportunity for risks. Everyone in the organization should be aware of their responsibilities and tasks. Identifying risks early at the start of every project. There could be some positive risks, and they should be focused on rather than focusing on only the negative risks. The positive risks provide opportunities to be taken advantage of no matter the situation. The stakes should be appropriately defined by distinguishing between the effects and the causes (Saedi et al., 2019). A risk matrix is used to assess and prioritize the risks. They can be calculated by considering the probability and the impact. When something is wrong, it is better to take responsibility rather than wait for someone else to solve the problem. Risk management is best when everyone takes action and commitment. The past mistakes also help to make sure that they are not repeated. The appropriate strategies are undertaken to manage risks. All the risks are documented in a risk register helps to improve information sharing and accountability. Regular monitoring and reviewing help to act quickly when there are risks in the organization. Risk management training is important for the board and all the employees so that they can contribute to risk management.
Conclusion
The risk governance and culture of a banking organization have to be improved. Proper risk governance structures must be established so the board can oversee the risks they may face. The members of an audit committee should be increased so that a comprehensive decision is made. Threats should be made an agenda at all board meetings to assist the banking organization in preparing to face a crisis.
Reference List
Altanashat, M., Al Dubai, M. and Alhety, S., 2019. The impact of enterprise risk management on institutional performance in Jordanian public shareholding companies. Journal of Business and Retail Management Research, 13(3).
Fraser, J.R., Quail, R. and Simkins, B. eds., 2021. Enterprise risk management: Today’s leading research and best practices for tomorrow’s executives. John Wiley & Sons.
Rehman, A.U. and Anwar, M., 2019. I was mediating the role of enterprise risk management practices between business strategy and SME performance. Small Enterprise Research, 26(2), pp.207-227.
Saeidi, P., Saeidi, S.P., Sofian, S., Saeidi, S.P., Nilashi, M. and Mardani, A., 2019. The impact of enterprise risk management on competitive advantage by moderating role of information technology. Computer standards & interfaces, 63, pp.67-82.
Shad, M.K., Lai, F.W., Fatt, C.L., Klemeš, J.J. and Bokhari, A., 2019. It is integrating sustainability reporting into enterprise risk management and its relationship with business performance: A conceptual framework. Journal of Cleaner Production, 208, pp.415-425.
write