The Institute of Internal Auditors is calling on the Group of Twenty nations to further strengthen its support of effective organizational governance worldwide.
In a letter to G20 Secretary-General Dr. Fahad bin Abdullah Toonsi, The IIA urges the G20 to reinforce the basic elements of governance as described in the G20/OECD Principles of Corporate Governance, which supports policymakers in bolstering the legal, regulatory, and institutional framework for corporate governance toward establishing economic efficiency, sustainable growth, and financial stability.
“Trust is instrumental to public confidence in the decisions and actions of leaders in all sectors, particularly during crises such as the COVID-19 pandemic,” IIA President and CEO Richard Chambers and IIA Global Chair Jenitha John wrote to the G20. “To build trust, appropriate structures and procedures must be in place to ensure integrity, accountability, and transparency within organizations. This is achievable only through effective governance.”
Regardless of industry, government, or size of an organization, governance can function successfully only if it possesses:
- Accountability by a governing body to stakeholders, achieved through transparent oversight, integrity, and leadership. Governing bodies must ensure disclosures are accurate, timely, reliable, comprehensive, and in compliance with legislative and regulatory requirements, and ethical norms.
- Reliable and well-informed action by management, including risk-based decision-making and judicious application of resources. This is critical to achieving the objectives of an organization. Management must provide direction and ensure analysis, planning, monitoring, risk oversight, and reporting back to the governing body.
- Independent and objective assurance and advice, which is crucial to clarity and confidence, and to promoting continuous improvement through rigorous inquiry and insightful communication. This is achieved through a fully resourced independent internal audit function that operates in accordance with international standards.
The IIA encourages the G20 to recognize those vital roles and embed them as fundamental components of the G20/OECD Principles of Corporate Governance. It also recommends using the recently updated Three Lines Model, which provides a strong foundation for securing organizational preparedness, resilience, and agility in times of change and uncertainty. 