Governance Structure in an Organization | Board of Directors | Board Level Sub Committees

GRC

Unleashing Governance, Board Oversight, Board Committees and Management   

Governance Board of Directors and Board Sub-Committees

Institutions such as banks, money service businesses (MSBs), payment gateways, financial technology (Fin-Techs), eCommerce, Manufacturing, trading, and other organizations need to develop and implement strong Governance Structures and Mechanisms to manage the affairs of the institution.      

Shareholders are required to ensure that they hire a dedicated team to oversee the overall business and operations on their behalf, therefore to govern the institution the Board is formed and suitable and experienced members are hired to join the Board. The Board of Directors may be dependent and independent, depending on the applicable Governance requirements, such as the Code of Corporate Governance implemented by regulators in the country. 



Board Committees

The Board of Directors forms different sub-level board committees to dedicatedly oversee specific matters and issues.  The committee members are board members and possess relevant knowledge and experience to supervise the assigned roles. The full Board of the institution must ensure that sub-committees are appropriate, and technically sound to supervise the assigned roles and domains. 

The Board committees of an institution may include:

  • Board Information Technology Committee (IT Committee)
  • Board Audit Committee (BAC)
  • Board Human Resource Committee (BHRC)
  • Board Risk Committee (BRC)
  • Board Finance Committee (BFC)
Board of Directors and Board Sub-Committees

Board Committee Members

Each of the above committees comprises relevant subject matter experts and they are required to perform their roles and responsibilities diligently, to manage company affairs and avoid or manage significant risks such as financial risks, operational risks, reputational risks, compliance risks, credit risks, etc.  Board Committee members are required to meet periodically, to review and discuss the relevant issues and matters, that they are responsible for overseeing. Such as the Board Audit Committee (BAC) is responsible for overseeing the significant audit issues and observations highlighted and reported by internal and external auditors, or regulatory authorities. BAC members are responsible for ensuring that internal controls are effective and appropriately implemented in the form of institutions' internal policies and procedures. BAC members also ensure that applicable financial reporting frameworks, standards, and regulatory requirements are identified and implemented. The purpose is to ensure that internal controls are robust and appropriately applied to avoid regulatory noncompliance and breaches.  

Secretary to Board Committees

Each Board committee assigns a relevant Secretary to the committee within the institution, who becomes the central contact person for the committee members. The Board Human Resources committee appoints the Head of the Human Resources department as its Secretary. Similarly, the Board IT Committee appoints the Chief Technology Officer (CTO) as its Secretary. The Secretaries to other Board committees appointed by the Board committee members may be as follows:
  • Board Audit Committee (BAC) - Chief Internal Auditor (CIA)
  • Board Risk Committee (BRC) - Chief Risk Officer (CRO)
  • Board Finance Committee (BFC) - Chief Financial Auditor (CFO)
Each Secretary must have relevant experience and skills to serve the Board committee and ensure that transparent, fair, and correct information is shared with Board members for their periodic review and supervision. 


Usman is an experienced GRC Trainer, and Consultant. He can be reached at: liboctober@gmail.com

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