Accounting Information Systems: The Processes and Controls, 2nd Edition

FUNCTIONS WITHIN THE CORPORATE GOVERNANCE PROCESS (STUDY OBJECTIVE 3)

The corporate governance process is composed of several interrelated functions, including management oversight, internal controls and compliance, financial stewardship, and ethical conduct.

MANAGEMENT OVERSIGHT

Who leads a company's leaders? This question relates to the concept of the management oversight function of corporate governance. There must be a level of supervision that oversees the company's leaders, including its board of directors, chief executives, and management team. Management oversight encompasses the policies and procedures in place to lead the directorship of the company.

The directorship of a company is generally considered to be its supervisors, managers, officers, and directors. A corporate organizational chart is typically structured in such a way that supervisors must report to managers, managers must report to an officer, and officers are responsible to the board of directors. The key to the effectiveness of this structure is the level of commitment from those in the positions of authority. Good management oversight involves leaders who are good communicators, attentive and responsive to those both above and below in the chain of command. These features make it possible for leaders to be effective at recruiting, motivating, evaluating, problem solving, and decision making. Overall, good leaders guide by example.

Management at every level within a company should communicate, both through ...