ICSB Foundation flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Governance definition

The system of rules, practices and processes by which an organization is directed, controlled and held to account, allocating authority among the board, management and stakeholders.

Business judgment rule

A legal principle protecting directors from liability when they act in good faith, on an informed basis, without conflict of interest and in the organization's best interests.

Conflict of interest rule

An interested director must declare the interest, is excluded from voting on the matter and is normally excluded from the quorum for that item.

Board skills matrix

A tool mapping the competencies required by the organization's strategy against the capabilities of current directors, identifying gaps that inform recruitment and development.

SMART objectives

A test for objectives requiring them to be specific, measurable, achievable, relevant and time-bound so that progress can be monitored objectively.

Balanced scorecard perspectives

Four perspectives used to translate strategy into measures: financial, customer, internal process, and learning and growth, each with objectives, measures, targets and initiatives.

Theory of change

A model linking inputs, activities, outputs, outcomes and impact, used to test whether the logic underlying a strategy is sound and measurable.

Strategic drift

A condition where incremental change and inertia leave an organization's strategy progressively misaligned with its changing external environment, often without a single triggering event.

Accounting equation

The fundamental relationship Assets = Liabilities + Equity, which every transaction must preserve, underpinning the statement of financial position.

Residual risk

The level of risk remaining after existing controls and treatments have been applied, as distinct from inherent risk assessed before controls.

Risk appetite statement

A board-approved statement defining the types and levels of risk the organization is willing to accept in pursuit of its objectives, with tolerances for each category.

Break-even point

The volume of activity at which total contribution equals fixed costs, calculated as fixed costs divided by contribution per unit.

Three lines model

A governance structure where management owns risk, a risk and compliance function provides oversight, and internal audit provides independent assurance to the board.

Whistleblowing protection

Arrangements providing confidential reporting channels and legal or policy protection from retaliation for individuals who report suspected wrongdoing in good faith.

Materiality threshold

A policy-set level above which an item, error or omission is significant enough to require disclosure, escalation or correction.

Compliance register

A record of each regulatory obligation, the responsible owner, the control that ensures compliance and the evidence retained to demonstrate it.

Segregation of duties

A control that separates authorization, custody of assets, recording and reconciliation so no single person can complete and conceal a transaction cycle.

Recovery time objective

The maximum acceptable period of disruption for a business process or system before the impact becomes unacceptable, guiding continuity planning.

Control design versus operating effectiveness

Design effectiveness asks whether a control can prevent or detect the risk; operating effectiveness asks whether it actually worked consistently over the period.

Assurance mapping

A structured view of which risks are covered by which assurance sources, revealing duplication and gaps across the three lines.

Double materiality

A sustainability reporting concept covering financial materiality, how sustainability affects the organization, and impact materiality, how the organization affects society and environment.

Scope 3 emissions

Indirect greenhouse gas emissions arising in the value chain, including purchased goods, business travel, commuting and use of sold products.

Greenwashing

Misleading communication that overstates environmental credentials or performance, mitigated by verifiable data, clear baselines and independent assurance.

Science-based targets

Emission reduction targets aligned with the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius, validated against a recognized methodology.

Data stewardship

The day-to-day role accountable for the quality, definition and appropriate use of a specific data set, distinct from executive ownership and technical custodianship.

CIA triad

The three core objectives of information security: confidentiality, ensuring access is restricted; integrity, ensuring accuracy; and availability, ensuring access when needed.

Least privilege

An access control principle granting users only the minimum permissions required for their role, reviewed periodically and revoked when no longer needed.

Algorithmic accountability

The obligation to document an automated system's purpose, data sources, validation results and human override arrangements, and to assign responsibility for its decisions.

Mendelow matrix

A stakeholder mapping tool plotting interest against influence to produce four groups: key players, keep satisfied, keep informed and minimal effort.

Stakeholder salience

A model ranking stakeholders by the combined presence of power, legitimacy and urgency, with higher combined attributes producing higher engagement priority.

Crisis communication principles

Acknowledge quickly, state only known facts, avoid speculation, commit to a next update time and maintain a single authoritative source of information.

Integrated reporting

A reporting approach explaining how strategy, governance, performance and prospects create value over time, connecting financial and non-financial information.