Given that the strategic management of business risk in the current global business is increasingly challenged by economic, environmental and social pressures with risks associated to globalization demanding innovative information technology system complete with risk management.
Kirkpatrick (2009) highlights the issue of remuneration of boards and senior management which remains a highly controversial issue. Remuneration systems have not been closely related to the strategy and risk objective of the company and its longer term interests.
Although the failure to show the implementation of approved strategy further the allegation of competent board oversight, company disclosures about conceivable risk factors were left unconcerned. Conceivable risk factors are key element of the Principles, Accounting standards and regulatory requirements that have also been discovered to be mistreated and inadequate.
Although Moeller (2011) suggests that well-recognized or commanded standards are important for effective enterprise governance and management, the macroeconomic condition post -2000 has become conscious that the pressures for the best practices out of corporate governance arrangements are required. By practicing a new system it must entail the complete commitment to take into account ethical decision making through proper understanding and analysis of the natures of risk and its potential threat.
As a result, an organization with the best practice not only have an optimal competitive advantage, even so it will sustain through threats and turbulent. A good integration of internal control systems explains an efficient incentive system includes risk management outside the company’s reporting system.