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  • An organization must set objectives and define why it exists and what it seeks to achieve..

  • An organization establishes a business model that is designed to achieve the objectives. The board is responsible for setting objectives, overseeing the business model, and measuring performance against objectives. Management is responsible for executing the strategy and operating the business model.

  • An organization must operate within defined boundaries. The mandated boundary is established by outside forces such as legal requirements.

  • The voluntary boundary is set by management and includes items such as public commitments, contractual obligations and organizational values. It is important to treat this boundary just as seriously as the boundary.

  • In the course of conducting business operations, certain obstacles may get in the way of achieving objectives. Obstacles may arise internally or externally.

  • An organization must have a strategy to avoid obstacles or prevent them from materializing. If obstacles arise, or if the organization steps outside of the boundaries, then management must quickly and appropriately respond.


  • Voluntary Boundaries
    boundary selected by management including public commitments, organizational values, contractual obligations, and other voluntary policies.


The Big Picture diagram

  • Mandated Boundaries
    boundary established by external forces including laws, government regulation, and other mandates.


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All organizations, whether conservative or aggressive, want to avoid bumps on the road to achieving objectives. Sometimes the functions of governance, risk management and compliance are perceived as functions that slow down the organization – the departments of NO, DON’T, and STOP

 

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The Big Picture
An organization must develop and sustain a capability or “program” to set objectives, identify the boundaries and obstacles and establish a system to let management know when it is getting close to (or crossing) a boundary or approaching an obstacle. Once detected, management must quickly and appropriately respond to minimize the impact on the organization. As issues are encountered and addressed, management should continuously improve the program to more effectively and efficiently prevent, detect and respond to similar issues in the future.