enterprise risk Management

enterprise risk Management

Introduction
Corporate governance, Enterprise Risk Management (ERM), and Sarbanes-Oxley (SOX) deal with the ethical behavior and conduct of employees for the benefit of all stakeholders. Whether an organization is a publicly traded, non-profit, or privately held the ethical policies adapted by the organization are good for business. In a report by the Association of British Insurers, “Found that companies that had good corporate governance have produced returns 18% higher than those with poor governance” (McCarthy, 2008, p.43). Some regulations are legislatively imposed on organizations, which are derived from previous corporate failures. Sarbanes-Oxley Act was the direct response to a wave of high profile corporate fraud and crime (Patzakis, 2008). Whirlpool and may other organizations have adapted a corporate governance policies to comply with existing regulations and self-regulate for the future. Whirlpool Corporation in know for it’s corporate governance and because of their proactive approach, Whirlpool was recently listed as one of the world’s most ethical companies for it’s best practices in global governance, business ethics, compliance and corporate responsibility (Appliance Ethics, 2008). Reed and Shedd state, “These codes are obviously an important source of business ethics” (2008, p. 42). By self-regulating organizations will prevent legislative action and mandatory compliance. Self-regulation is a preventive action used by individual organizations and industry trade groups. “In 1992 the International Franchising Association (IFA) adopted a new code of ethics. Officers of the association indicated that an important reason for adopting the new code was to head off government regulation of the franchising through self-policing” (Reed & Shedd, 2004, p. 32).
Corporate Governance
Corporate governance is a conglomeration of legislative regulations and professional associations and professional organizations recommendations to guide...