The role of internal audit in building a sustainable organizational culture has once again been brought to the fore.
This was made known recently by the Managing Director and Chief Executive Officer of the Nigeria Mortgage Refinance Company (NMRC), Mr Kehinde Ogundimu, during the 50th Quarterly General Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) hosted by NMRC.
Delivering the Keynote Address on the theme; ‘The Role of Internal Audit in Building a Sustainable Organizational Culture’, Mr. Ogundimu said that the failure of many corporate giants like Enron and some of the liquidated local banks in Nigeria has been attributed largely to poor corporate governance, driven by poor organizational culture, noting that building and sustaining a good corporate culture is critical to the stability and survival of institutions and the Nigerian financial system.
He said “a distinguishing feature of leading organizations is their culture. Culture affects performance, employee engagement, and the ability to create an innovative and positive work environment. Many Chief Executive Officers believe that improving culture would improve the value of their companies because organizational culture impacts the appetite for change, innovation and risk awareness.”
Continuing, Ogundimu said that there is a strong relationship between organizational culture and corporate brand. Every organization including financial institutions values its brand and will go to every extent to protect it. The organizational culture must be right to sustain the reputation of the brand. He noted that “Poor organizational culture heightens reputational risk exposure to the organization and must be carefully managed.”
Highlighting the role of Internal Audit (IA) in building a sustainable organizational culture, Mr. Ogundimu said that an independent, objective assurance and consulting activity of the internal audit is designed to add value and improve an organization’s operations.
This, he said, is by assisting in the establishment and sustenance of a good organizational culture through evaluating the design, implementation, and effectiveness of the organization’s cultural/ethics-related policies, procedures, programs, and practices.
Being comfortable in their understanding of culture before starting to audit the indicators; Include an element of culture into every risk-based audit using a testing program, survey, or both; Ensuring bank-wide compliance with internal policies and procedures, relevant codes of corporate governance, other relevant laws, regulations and standards and recommendation of consequences for breaches, amongst others.
Also speaking in his welcome address, the Chairman of ACAEBIN, Mr. Yinka Tiamiyu underscored the importance of the theme of the meeting, stating that it encapsulates what the internal audit function does – to what extent processes, procedure, actions and the tone at the top are in line with the values, ethics, risk appetite and policies of the organization.
He noted that risk Management, Control, and Governance are key elements in building a sustainable organizational culture. He said that as an advocacy group, the Association is committed to collaborating with all relevant stakeholders in the banking industry in a bid to fashion out ways of improving collaboration, support, and information sharing, especially in the fight against banking fraud. NNL.