Reflective Essay: Personal Views on Governance & Risk Management

This essay provides a reflective overview of corporate governance and risk management, emphasizing their key characteristics and importance in various organizations. It covers aspects such as organizational strategy, risk assessment, stakeholder interests, and the role of effective leadership in ensuring responsible decision-making and performance. The essay also discusses the significance of risk management in identifying, evaluating, and mitigating potential threats to an organization's assets and operations. It highlights the importance of corporate governance in setting rules for business management, improving company reputation, and reducing the potential for fraud and conflicts. The essay concludes by emphasizing the importance of risk management in identifying risks, providing insights to management, and building a better defense against business liabilities.

Running Head: CORPORATE GOVERNANCE AND RISK MANAGEMENT 1
Corporate Governance and Risk Management
Name:
Institution Affiliation:

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Introduction
Corporate governance refers to various systems of rules, processes, together with
practices by which a corporation is prohibited and managed. Besides, corporate governance is a
vital aspect in the operations of every corporation as it offers an appropriate framework for
achieving objectives of the company. It practically includes every area of management, from
encounter plans together with inner controls to offer dimension of performance as well as
corporate disclosure. It comprise of matching the benefits of a range of stakeholders of the
company. Such interests comprise of management, shareholders, suppliers, customers,
government, financiers, alongside community where the organization operates (Jankensgård,
2019). On the other end, risk management refers to all of the techniques that an organization
utilizes towards minimization of financial losses (Dionne, Maalaoui Chun, & Triki, 2012). It
comprises of ideas that involve evaluation identification, along with control prioritization of
dangers subsequent to process of coordination and financial request of resources to reduce, with
monitors the chance, or impacts of adverse events or to exploit the awareness of prospects. It
involves ideas of planning processes of the company towards identification and controlling
threats to its essential assets that comprise of proprietary corporate information, personally
identification data of a customer, and intellectual property (Tara & Sadri, 2015). Therefore, the
main target of this survey article focus on defining corporate governance along with management
of risk while focusing on their key characteristic and importance in operations of different
organizations around the global society.
Key characteristics of corporate governance as well as management of risk
Business governance

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For operations of leaders to be effective, they have to take responsibility for their
decisions and the performance of the organization in general. The specific characteristics of
corporate are several, and generally, involve an emphasis on developing and maintaining the
direction of the company and promoting goodwill with shareholders and other stakeholders.
Some of the characteristics of corporate governance comprise of clear organizational strategy,
effective management of risk, discipline and commitment, fairness to workers, transparency and
sharing of information, regular self-evaluation, and social responsibility. Good corporate
governance commences with a clear strategy for the organization (Grove & Clouse, 2016).
Therefore, understanding the overall strategy assist the workforce of an organization in staying
focused on the mission of the organization and meeting the needs of the clients in the targeted
marketplace. Therefore, different pillars or traits that help in corporate governance include
fairness, independence, and accountability, together with transparency (Srivastav & Hagendorff,
2015). Al these pillars work effectively to improve board commitment, good board practices,
transparent disclosure, well-defined rights of shareholders, and functional and efficient control of
the environment.
Corporate risk management
It is a systematic process that deals with the issues of uncertainty. It is an essential to
discipline under the broad sector of management. It has the responsibility for undesirable events
that help in preparation for worst-case scenes. It has the capacity of assisting organizations in
making various choices by offering various alternatives together with approaches that assist
managers to choose a solitary choice that has the minimum probability of losses. Some of the
characteristics of corporate risk management consist of preparation, planning for unknown
events and conditions of the market that unfold before an entrepreneur is the purpose of

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management of risk. They have the traits of establishing the context before dealing with the risk,
identification of loss, analysis and risk evaluation, treating risk, and monitoring and review of
risk.
Importance of corporate governance along with management of risk
Corporate management
Corporate authority in most operations is linked with public organizations, but small
businesses can also gain from such practice. Corporate governance is essential in business
society as it helps in setting rules for the management of businesses (Pirson, M., & Turnbull,
2016). It improves the reputation of the company. For instance, when a company publicizes their
policies of governing businesses and describe how they operate, addition shareholders tend to be
eager to work with them in their daily operations. Besides, corporate governance leads to fewer
fines, lawsuits, and penalties in operations of the company. Grove & Clouse (2016) reported that
that corporate governance also decreases the number of fraud and conflicts in operations o
various companies. It limits the potential for bad behavior for workers by instituting levels to
reduce cases of potential fraud and conflict of interest among workers.
Corporate risk management
It is evident in present competitive society that risk has become an integral part of
individual life. One must be able to face different risks in their operations and have the strength
to overcome them with time (Jankensgård, 2019). Some of the importance of the process of
corporate risk management includes risk identification, as it assists managers to evaluate the risk
and organize for proper response plan for the risk. The processes of risk management help in
seeing risks that are not apparent. Therefore, management of risk helps team of management to

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identify and provide a deeper understanding of all kinds of risks (Tara & Sadri, 2015). Risk
management also provides insights as well as support to the management. It helps in building a
better defense to class-actions by reducing business liabilities.

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References
Dionne, G., Maalaoui Chun, O., & Triki, T. (2012). Risk Management and Corporate
Governance: The Importance of Independence and Financial Knowledge. SSRN
Electronic Journal. doi: 10.2139/ssrn.2082515
Grove, H., & Clouse, M. (2016). Strategic risk management for enhanced corporate governance.
Corporate Ownership And Control, 13(4). doi: 10.22495/cocv13i4c1p3
Jankensgård, H. (2019). A theory of enterprise risk management. Corporate Governance: The
International Journal Of Business In Society. doi: 10.1108/cg-02-2018-0092
Pirson, M., & Turnbull, S. (2016). Corporate Governance, Risk Management, and the Financial
Crisis: An Information Processing View. Corporate Governance: An International
Review, 19(5), 459-470. doi: 10.1111/j.1467-8683.2011.00860.x
Srivastav, A., & Hagendorff, J. (2015). Corporate Governance and Bank Risk-taking. Corporate
Governance: An International Review, 24(3), 334-345. doi: 10.1111/corg.12133
Tara, S., & Sadri, S. (2015). Corporate Governance and Risk Management: An Indian
Perspective. The International Journal Of Management Science And Business
Administration, 1(9), 33-39. doi: 10.18775/ijmsba.1849-5664-5419.2014.19.1003