COSO, NACD select PwC to build corporate governance framework

PricewaterhouseCoopers U.S. has been selected to assist the Committee of Sponsoring Organizations of the Treadway Commission and the National Association of Corporate Directors in developing a corporate governance framework.

COSO and the NACD issued a request for proposals to develop the framework in February. The selection process involved numerous organizations within and outside the U.S.

COSO is an organization that provides thought leadership on risk management, governance and fraud deterrence. It 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. The NACD is a member organization for corporate directors and has long focused on corporate governance.

“The U.S. has the largest capital markets and stock exchanges in the world. Yet the U.S. does not have a recognized governance framework or model,” Lucia Wind, executive director and chair of COSO, said in a statement. “Effective governance is more critical today than ever. PwC US is an experienced leader in corporate governance, and we look forward to having their tremendous resources and expertise available to us as we get this important project off the ground with their assistance.” 

The new framework is slated to be completed in the fall of 2025, and will complement COSO’s existing internal control and enterprise risk management frameworks. The aim is broad U.S. adoption, specifically: 

• Public companies seeking to self-assess and enhance governance practices, and by start-up businesses desiring to build up their governance practices and processes; 
• Private organizations seeking best practices or as part of readiness activities related to initial public offering efforts; and 
• External auditors, internal auditors, rating agencies, investors, listing agencies and/or regulators finding such a framework useful in assessing governance practices at related entities. 

“We anticipate companies will be able to use the framework as an asset to embrace navigating a complex business environment that is evolving at an unprecedented velocity, where effective governance is — and will remain — critical,” said PwC Governance Insights Center leader Maria Moats.

“Good governance is a competitive advantage to every organization,” said NACD president and CEO Peter Gleason. “Yet, boards and management may often struggle to effectively integrate good governance in how their organizations operate. For example, the design of incentives or the pursuit of major innovation might possibly create damaging blind spots. The CGF will help companies ensure that governance is cohesive in guiding behaviors from the boardroom to the frontlines.”