By Jeremiah Ndhlovu
IN today’s fast-paced business world, organisations are embracing combined assurance models to streamline risk management and ensure that decision-makers have a clear, holistic view of their enterprise’s key risks. This approach optimises assurance functions, enhances governance, and allows governing bodies to take informed actions based on a unified picture of organisational risks.
The Challenges of Traditional Risk Models
Historically, organisations have relied on the “three lines of defence” model to manage enterprise-wide risks. This model segments risk management into operational units, risk and compliance functions, and internal audit. However, recent years have seen notable failures in risk management—even in organisations following this framework.
So, what’s going wrong?
The issue often lies in siloed approaches to risk assessment. Different assurance providers, working independently, create gaps in risk evaluation. This duplication of efforts leads to “assurance fatigue” and conflicting risk ratings, leaving governing bodies with an incomplete picture of organisational risks.
Why Combined Assurance is the Future of Risk Management
The King IV Report on Corporate Governance offers a solution through combined assurance, a model that promotes collaboration between assurance providers across the three lines of defence. As the Institute of Directors in South Africa explains, “A combined assurance model incorporates and optimises all assurance services and functions so that, taken as a whole, they enable an effective control environment.”
This integrated approach not only prevents duplication of efforts but also ensures that all risks are evaluated through a consistent lens. When assurance providers work together, they can provide governing bodies with a comprehensive, real-time understanding of both internal and external risks.
How the King IV Code is Leading the Way
The combined assurance model is at the heart of the King IV Code, which urges organisations to align risk evaluation criteria, eliminate silos, and foster collaboration. Through a shared understanding of risk, organisations can produce a combined assurance report that maps assurance results against prioritised risks. This report provides governing bodies with the insights they need to spot under-assured or over-assured risks and make strategic decisions accordingly.
The key to success lies in the combined assurance forum, where representatives from all three lines of defence come together to discuss risk matters. Through continuous tracking and alignment of risk management tools, such as risk appetite and risk assessment criteria, organisations can ensure that assurance providers are working towards the same goal.
Wrapping It All Up
In an increasingly complex risk landscape, the combined assurance model offers a powerful solution. By breaking down silos, aligning risk assessments, and fostering collaboration, organisations can enhance the quality of governance and ensure long-term success. As businesses face growing challenges, from cyber threats to financial instability, combined assurance is no longer just a recommendation—it’s an imperative for organisations looking to secure their future.
