For employees at all levels of an organization, change is inevitable.
In manufacturing, it may come with new production machinery. In engineering, with new CAD software. In banking, new regulatory oversight.
For Accounting, change comes with automation solutions that have become more essential than ever in our current environment.
Change is a necessary part of growth and success. And while it can pose major challenges, there are changes that organizations can begin making today to reduce risk and establish stronger internal controls for your distributed workforce.
Much of the work coming from the Committee of Sponsoring Organizations of the Treadway Commission, more commonly known as COSO, focuses on these two areas.
According to Wikipedia, COSO was formed “to guide executive management and governance entities on relevant aspects of organizational governance, business ethics, internal control, enterprise risk management, fraud, and financial reporting.”
To do that, COSO publishes comprehensive guidance on internal controls and risk management, along with other related materials. Within these materials, the concept of change—and how to deal with it—is a major topic.
COSO Chair Paul Sobel, who is Vice President and Chief Risk Officer at Georgia-Pacific LLC, points to COSO’s updated Enterprise Risk Management framework as evidence. The framework is organized around five major components, which are supported by a number of principles.
“Principle 15 is called ‘Assesses Substantial Change,’” he says. “It’s intended to encourage executives to look at all the ways change can affect the organization’s strategy and business objectives.
“Change can come from internal innovation or changes in leadership, and it can come from external sources, like changes in markets and customer preferences,” he says. “It can happen quickly, but it can also occur slowly, and the impact can be profound.”
Sobel cites climate change as an example.
“I’ve had executives asking about just that—how to deal with climate change,” he says. “Since there are so many potential outcomes from climate change, the best approach is to narrow your assessment down to specific effects of climate change—things like water shortages or intensifying natural disasters that might affect your business directly.”
At a higher level though, the COSO materials strive to help executives build an organizational culture that—rather than running away from change—can recognize and respond to changes of all types with the confidence that comes from solid planning.