May 2016 Q4 b.

The process by which organisations are directed, controlled and held to account. This is underpinned by the principles of openness, integrity and accountability.
Governance is concerned with structures and processes for decision making, accountability, control and behaviour at the top of the organisation.

(a) Standards of Behaviour
This may be summed up as leadership, codes of conduct, objectivity, integrity and honesty
– Leaders must be role-models
– Codes of conduct must define standards of behaviour
– Employees must not be influenced by prejudice
– Bias or conflicts of interest.
(b) Organisational Structures and Processes
These include statutory accountability, accountability for public money and communication with stakeholders.
– Compliance with legal rules;
– Safeguarding of assets and value for money
– Clear channels of communication with stakeholders and effective operation of channels of communication.
(c) Control
They include Risk Management, Internal Audit, Audit Committees and external audit process;
– Effective systems of risk management must be established;
– Effective internal audit function must be established;
– There must be independent review of framework of control by Audit Committees;
– Framework of internal controls should be established.
(d) External Reporting
– Need for timely publishing of financial statements and results of operations;
– Need for responsibility accounting, that is, responsibility for approval of budget, authorization of use of funds, maintenance of effective framework of control;
– Need for appropriate accounting principles and prudent judgement, and estimates and ensuring adherence to applicable accounting standards;
– Need for reports of relevant performance measures to demonstrate effective, efficient and economic use of resources;
– External Auditors should ensure objectivity and professionalism in their work.