The accountancy profession has a key role to play in strengthening corporate governance and facilitating the integration of governance and sustainability into the strategy, operations, and reporting of an organisation, say accounting leaders from around the world which met in in Geneva on October 12 to discuss next steps for global corporate governance reforms.
With an eye to helping prevent future financial crises, the accountants agree that boards should be focused on the long-term sustainability of their businesses. As such, corporate governance reform must include strengthening board oversight of management, positioning risk management as a key board responsibility, and encouraging remuneration practices that balance risk and long-term (social, environmental, and economic) performance criteria.
At the conference hosted by the International Federation of Accountants (IFAC), the accountants pointed out that governance is more than having the right structures, regulation and principles in place—it is about ensuring that the right behaviors and processes are in place. They assert that governance mechanisms need to be strengthened at banks and other companies to ensure better oversight of risk management and executive compensation.
“Professional accountants can serve as a critical link to ensure that good corporate governance is practiced,” says IFAC President Robert L. Bunting. “Accountants provide strategic direction to boards and governing bodies, aiming to ensure that risks are managed appropriately and resources are used responsibly—all key processes for facilitating sound corporate governance.”
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