Gestion De Riesgos Ocde

RISK MANAGEMENT & CORPORATE GOVERNANCE
By Richard Anderson & Associates

This report was prepared for the OECD by R. C. Anderson (rc.anderson@tiscali.co.uk). The views expressed herein are those of the author and do not necessarily reflect those of the OECD or its member countries.

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Executive summary

101 This paper portrays a picture of Corporate Governance in The United Kingdom,the United States of America and France in the banking sector being severely challenged in an extreme Financial Crisis that has seen household banking names run into trouble, some to fail and others to be taken into various degrees of national ownership. Corporate Governance is stretched to the extent that it is distressed and has been unable to cope with the demands placed on it. The rationale forsaying that it is stretched is as follows:        Corporate Governance is (almost) voluntary; Investor pressures are fierce, leading many businesses to undertake risks that simply are not in the best long term interests of the organisation; Non-executive oversight is stretched in that directors only have a limited amount of time to devote to the organisation, but almost unlimitedresponsibilities; External audit is stretched to a point where the degree of reliance that is placed upon it is out of proportion to the amount of work that actually goes into it; Internal audit is struggling, largely because many internal auditors are not the beneficiaries of the regard that they are owed; Obtaining assurance from regulators, financial analysts and rating agencies cannot be comprehensive;Which leaves boards with dependence on management including the risk management team, and General Counsel (or the Company Secretary).

102 It is a conclusion of this paper that Corporate Governance alone is not the cause of the current Financial Crisis. However, Corporate Governance could have prevented some of the worst aspects of the crisis had effective governance operated throughout theperiod of time during which the problems were developing and before they crystallised. Furthermore, effective Corporate Governance could have helped to reduce the catastrophic impacts that the global and national economies are now suffering. 103 The main finding of this paper is that the balance between risk-taking (the life blood of the free market) and risk avoidance is no longer functioning.Similarly, the balance between remuneration (one of the principal drivers of the performance culture in the banking sector) and ethical behaviours no longer operates appropriately. The oversight over these two principal balancing acts, which should be exercised by the board, and in particular by the non-executive or independent directors does not function properly because the assurance functions are notgiven sufficient weight. Therefore as a matter of policy, in order to meet the needs of society, there is a need for a significant rebalancing of boards and assurance functions in companies that are of societal importance, such as major banks. Oversight by non-executive directors is sometimes too remote and distant and it is difficult, in global, complex organisations for this to be dischargedeffectively by part-time non-executive directors. Accordingly policy makers should consider whether more emphasis should be given to oversight by both the creation of full-time non-executive directors and the development of a broader concept of assurance. 104 While the focus of this paper has been on the financial services sector, and particularly on banks, many of the recommendations would equallybe valid to other organisations which have a major societal impact, including for example corporations that play a major part in the critical 2

national and international infrastructure of the national and global economies. The re-balancing of responsibilities would help to ensure that such organisations remain focused on the needs of society as a whole rather than simply on the investor and...