The Committee of Sponsoring Organizations of the Treadway Commission and the National Association of Corporate Directors have released an exposure draft of their Corporate Governance Framework and are asking for public comments until July 11.
Last May, COSO and the NACD selected PwC to be the lead author to develop a comprehensive corporate governance framework offering principles-based guidance for organizations to establish and strengthen their governance practices, beginning in the boardroom and spreading throughout the organization. Last December, COSO released a governance framework for internal controls over robotic process automation.
The Corporate Governance Framework is designed to complement and align with COSO’s longstanding Internal Control and Enterprise Risk Management frameworks. It includes practices to help organizations improve their governance effectiveness, manage risks proactively and create long-term value. COSO is jointly sponsored by the American Accounting Association, the American Institute of CPAs, Financial Executives International, the Institute of Management Accountants and the Institute of Internal Auditors.
“Resilient and well-structured corporate governance is the foundation of trust in capital markets, ethical business practices, and sustainable financial performance,” said COSO executive director and chair Lucia Wind in a statement Tuesday. “This framework provides organizations with a structured yet flexible approach to governance, ensuring they can navigate today’s complex regulatory and risk landscape with confidence, enable organizational effectiveness, while building long term value for its shareholders.”
Public comments will be accepted until July 11, 2025. The COSO website provides additional submission information.
COSO and the NACD are encouraging a holistic approach to defining corporate governance, extending beyond the boardroom to encompass the practices, information channels, and processes that govern how an entity is being directed, managed and controlled.
“Strong corporate governance creates a competitive advantage for organizations of all sizes, stages of maturity, and growth strategies,” said NACD president and CEO Peter Gleason in a statement. “This framework will help boards and management align on the importance and scope of governance in a time of tremendous complexity and disruption. When adapted to fit an organization’s specific needs, the framework will help drive better business outcomes and higher-quality board and management performance.”
COSO and the NACD see corporate governance as involving the oversight and processes by which an informed board and management team steers an entity toward executing its strategies and goals while maximizing long-term shareholder value in an ethical manner and within the relevant legal and regulatory environment.
“By providing a common language and practical guidance, it empowers boards, management, and employees to work together in building resilient, accountable organizations that can adapt, compete, and deliver long-term value to shareholders and other key stakeholders,” said Lillian Borsa and Brian Schwartz, PwC US principals and co-leads of the COSO Corporate Governance Framework, in a joint statement.
