2 Organizational Governance Free Online FlashCards

What is organizational governance?

Organizational governance is the system for directing, monitoring, and holding an organization accountable.

How do unitary and two-tier board structures differ?

A unitary board includes executive and non-executive directors together; a two-tier structure separates supervisory and management boards.

What rights may owners or members exercise?

Owners or members exercise rights established by law and governing documents, such as electing directors or approving specified fundamental changes.

What does internal audit provide, and what must it avoid?

Internal audit provides independent, objective assurance and advice on governance, risk management, and controls; it should not take responsibility for activities it audits.

How does oversight differ from management?

The governing body sets or approves direction and boundaries; management makes operational decisions within its delegated authority.

What should an effective organizational policy specify?

Effective policies state their purpose, scope, responsibilities, required actions, exceptions, and consequences for noncompliance.

What safeguards can govern delegated supplier selection?

For supplier selection, arrangements can set spending limits, require conflict disclosures and competitive bidding, and require managers to report exceptions.

What are the governing body's core responsibilities?

The governing body sets direction, oversees management, approves major decisions, monitors performance and risk, and answers to owners or stakeholders.

Do board committees replace the governing body's responsibility?

Committees provide focused oversight, but they do not automatically replace the governing body's ultimate responsibility.

What is senior management responsible for?

Senior management develops and executes plans within delegated authority, manages operations and risk, allocates resources, and reports results and significant issues.

What are the three roles in the IIA Three Lines Model?

Operational management owns and manages risks; specialist functions support and monitor risk management; internal audit provides independent assurance.

What should a sound decision process establish?

A clear decision process identifies the authorized decision-maker, required consultation and evidence, alternatives and conflicts, documentation, and follow-up.