Questions and Answers
What should the company ensure regarding non-financial and sustainability issues?
The company should ensure that the material and reportable non-financial and sustainability issues are disclosed.
Companies should adopt a globally recognized standard/framework in reporting sustainability and non-financial issues.
True
Which of the following frameworks can be used for disclosure of sustainability issues? (Select all that apply)
What is the purpose of a comprehensive communication channel for a company?
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The manner of disseminating relevant information is more important than the content itself.
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What should the company have in terms of internal control system and risk management?
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An adequate and effective internal control system helps sustain safe and sound operations and implement ___ to attain corporate goals.
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What is the role of the independent internal audit function?
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Study Notes
Increasing Focus on Non-Financial and Sustainability Reporting
- Companies must disclose material non-financial and sustainability issues to stakeholders.
- A focused policy on non-financial information disclosure emphasizes economic, environmental, social, and governance (EESG) management.
- It is crucial for companies to adopt globally recognized reporting standards like G4 Framework (GRI), Integrated Reporting Framework (IIRC), and SASB’s Framework.
- External pressures such as resource scarcity and globalization influence corporate sustainability responses, impacting long-term viability and competitiveness.
- Effective disclosure addresses both strategic and operational objectives concerning sustainability challenges.
Promoting Comprehensive and Cost-Efficient Access to Information
- Companies should establish comprehensive and efficient communication channels for relevant information dissemination.
- Media and analyst briefings are vital for timely communication of public and material information to shareholders and investors.
- The communication strategy should not only focus on content but also on how the information is delivered.
- Organized reporting channels enhance timely access to important information that influences investor decision-making.
Strengthening Internal Control System and Enterprise Risk Management Framework
- A robust internal control system and risk management framework are essential for integrity, transparency, and governance in business operations.
- Internal control systems should be sufficient and effective, tailored to the company's size, risk profile, and operational complexity.
- Effective controls foster management oversight, risk recognition, control activities, and proactive communication on risk management.
- An effective enterprise risk management framework encompasses risk identification, measurement, evaluation, mitigation, and monitoring.
Internal Audit Function
- Companies should establish an independent internal audit function to ensure unbiased assurance and improve operations.
- Internal audits enhance governance, risk management, and control functions across the organization.
- Core functions of internal audit:
- Provide independent risk-based assurance to the Board and management on governance and control processes.
- Execute regular audits according to an annual plan and company risk assessments.
- Offer consulting and advisory services related to governance and control as needed.
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Description
This quiz focuses on Principle 10 of corporate governance, which emphasizes the importance of non-financial and sustainability reporting. Participants will explore the guidelines for disclosing non-financial information and the management of economic, environmental, social, and governance (EESG) issues. Test your knowledge on how these principles affect business sustainability!
