How to Iimplement Internal Controls as a CEO

Generally, governing boards do not design internal controls or prepare the written policies they adopt. The governing board relies upon management, especially the chief executive officer (CEO), to create the policies needed to ensure that services are provided effectively and assets safeguarded. The CEO in turn relies upon managers and department heads to recommend and implement procedures that lower identified risks. Each board member should carefully review and seek to understand policies and procedures presented to them for ratification.
             Within the managerial ranks, the CEO provides the leadership needed to establish and guide an integrated internal control framework. The CEO establishes a positive "tone at the top" by conducting an organization's affairs in an honest and ethical manner and establishing accountability at all levels of the organization. If the CEO does not demonstrate strong support for internal controls, the organization as a whole will be unlikely to practice good internal controls. Finance officers are instrumental in overseeing accounting and financial reporting controls. A finance officer's responsibilities for supervising the preparation of accounting records, producing financial reports and demonstrating compliance with State and federal laws are priority goals. Because of their vital responsibilities, finance officers should be knowledgeable about both control procedures and the integrated internal control framework taken as a whole. Finance officers and business officials also need to work closely with the CEO in fostering a positive control environment.
             Even though the CEO leads the entity's approach to the control framework, it is the operational managers, production managers, and department heads who are the front line for implementing and monitoring internal controls. Managers and department heads are generally responsible for identifying potential risks, designing and implementing controls for their areas of responsibility, and keeping current with events and changes that affect the controls they have put into place.