Must Read-OCEG Corporate Governance Model “RED BOOK” 2.0

September 19, 2008

An important Corporate Governance document was released last month. The Open Compliance and Ethics Group (OCEG), a non-profit organization announced its Red Book 2.0 embracing its GRC¹ Capability Model –

¹Governance, Risk Management, Compliance

OCEG’s GRC Capability Model is the only publicly vetted framework I know of, that has taken the best from every other set of standards or guidance and combined them to establish clear and concise practices for an effective approach to compliance, wherever you operate,” said former vice-chair of the U.S. Sentencing Commission, John Steer, who is also a senior partner with Allenbaugh Samini LLP and a Red Book steering committee co-chair. “It takes the basic structure for effective compliance in the federal sentencing guidelines and fills it out with a wealth of useful guidance for practitioners and compliance professionals. I am pleased to have been involved in its development and I encourage everyone to review it and use it.

The document is available free at Red Book 2.0. This is a remarkably comprehensive approach that should be a major advancement for Corporate Governance practitioners. What I find noteworthy is a sharp focus on ethical matters.

This is the key to effective Corporate Governance –

A strong culture of ethical culture, as an aspect of internal governance, provides a safety net when formal controls and structures are weak or nonexistent — while, at the same time, providing an environment that helps the workforce reach its highest level of productivity.

I found an interesting statistic: in this 214 page document there are 92 references to the word “ethical”.

A key section in this document is the Culture and Context section (acrobat pages 45 to 60). This includes a comprehensive organizational and internal/external factors review.

Understand the current culture and the internal and external business contexts in which the organization operates, so that the GRC system can address current realities – and identify opportunities to affect the context to be more congruent with desired organizational outcomes.

There is an comprehensive list of contributors to this document. The OCEG is soliciting comments and there is a form on the same page for downloading this document that you can use to add your comments.

You may also want to visit OCEG’s website. There are many resources available to basic free membership.

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