ISO 37000

GOVERNANCE OF ORGANIZATIONS

[Name] TH E IN TERN ATIONAL

STANDARD O N GOV ERNANCE
[Role(s) O F O RGAN IZATIONS
Organization(s)]

ISO Technical Committee 309 - Governance of Organizations

ISO 37000 – Governance of organizations

INTRODUCTION
1. The evolving organizational
governance landscape

2. Introducing ISO 37000

3. ISO 37000 governance principles

4. Key take-aways
ISO 37000 – Governance of organizations

The evolving
organizational
governance
landscape
ISO 37000 – Governance of organizations

Why Governance?

”sustainable development cannot be

realized without…good governance at
all levels and transparent, effective
and accountable organizations”

(UN Agenda 2030)

 ISO 37000 – Governance of organizations

General Governance Trends

STAKEHOLDERS ESG PURPOSE
2019 US Business Roundtable: Target setting and reporting on WEF 2021 “The definition of
material impacts on and by an . governance is evolving as
“We share a fundamental commitment
to all our stakeholders”. organization of ‘Environmental, organizations are increasingly
Social and Governance’ matters is expected to define and embed their
increasingly expected by investors purpose at the centre of their
2020 World Economic Forum (WEF)
and stakeholders worldwide. business.”
Manifesto: “The purpose of a
company is to engage all its
stakeholders in shared and sustained
value creation”.
 ISO 37000 – Governance of organizations

Governance Trends (cont.)

ISO 37000 supports organizations to meet evolving disclosure requirements - for example

NFRD & CSRD EFRAG, GRI etc. TCFD

The European Union’s Non-Financial The European Financial Reporting The 2017 Task Force on Climate-
Reporting Directive (NFRD) Advisory Group (EFRAG) develops Related Financial Disclosures
establishes that large companies and promotes European views in (“TCFD”), established by the
must disclose non-financial and the field of financial reporting, Financial Stability Board, issues
diversity information regarding including on sustainability, and recommendations on climate-
environmental and social matters, advises the European Commission. related financial disclosure and
human rights, anti-corruption and The international organization guides companies in allocating
bribery. Global Reporting Initiative (GRI) assets environmental-friendly.
has issued Sustainability
Standards in 2016 and a Guidance
for corporate reporting on
Sustainable Development Goals in
2017. 6
 ISO 37000 – Governance of organizations

The Shifting Governance Reporting Landscape

New ISSB EFRAG – New EU
International (consolidation of Reporting
New TCFD weighted Accounting
SASB, IIRC and
mandatory Standards Frameworks for
CDSB) Non-Financial
guidance on the
way! Reporting

Mandatory
Disclosure
Universally EU Directives
Expected
Accepted Countries
developing
similar
approaches

GRI co-construction
Disclosure if of the forthcoming
Required
EU standards
7
 ISO 37000 – Governance of organizations

How to make sense of all of this?

Governance Foundations Unsustainability The New Governance Norm
All organizations exist for a The end goals of long-term Views about organizations and their
meaningful reason. They have a societal wellbeing and the governance have been changing fast
purpose – the ultimate value they means to achieve it (healthy towards organizations:
generate for stakeholders. social and environmental • existing for a purpose aligned with
systems) have been society’s long-term wellbeing
Governance provides the direction, ungoverned. • whilst protecting the social and
oversight and accountability for and environmental systems that underpin
of organizations so that they are clear Corruption and other self- this wellbeing (means)
about the goals and the parameters interested behavior at • make decisions in an innovative,
within which to achieve them. governing body and prudent and ethical manner (mode).
management level led to lack of
Until recently, governance was mostly trust and increased costs of South Africa’s King IV Code is a good
used to optimize financial benefit to capital allocation, lack of example of countries/
the organization and its shareholders innovation and loss of organizations that paved
– self-interest was institutionalized. competitive strength. the way to ISO 37000.
ISO 37000 – Governance of organizations

Organizations
need to play their
role & here is the
foundational
instrument

9
 ISO 37000 – Governance of organizations

ISO 37000 key stats

Scoping: 2016-2017
Development: 2017-2021
Countries involved: 77 countries
Liaisons involved: 24 liaisons were involved in its
development
Comments: >1,500 unique comments resolved
by WG1
Approval: The final ballot attracted 100%
approval and all 164 ISO member
countries had the opportunity to
vote
Publication: The standard was published on 14
September 2021.
 ISO 37000 – Governance of organizations

FIRST GLOBAL STANDARD ON THE BENCHMARK FUNDAMENTAL

GOVERNANCE OF on h ow to p u t p u rp os e at t h e for o rg an iz ation a l p u rp os e ,
ORGANIZATIONS c e n ter o f g ove rnan c e so as to va l ues, e t hics, a c c o unt abil ity,
Pu b l is h e d on 14.09.2021, ISO d ire c t org an ization s e th ic al l y, t h e i n tern al c o n trol s yste m,
37000 is th e p i o n ee r g u id el ine re sp on sib l y, an d e ffe c tive l y. a s s u ran c e a n d r i s k g ove rn an c e.
on th e top ic f or al l
org an ization s .

REDUCES INTERNATIONAL
COMPLEXITY & COSTS
The instrument:
was d e ve l op e d b y 7 7 c o u n tries a n d
enables transparency and 2 4 i n tern ation a l o rg an iz ation s .

ISO 37000
comparability across organizations T h e m o st a u th or it ative g l o b al
and reduces complexity and costs, d o c u me nt o n g o o d g ove rn an c e o f
by providing a universal a l l o rg an ization s .
understanding of governance.

11
ISO 37000 – Governance of organizations

The Role of ISO

12
 ISO 37000 – Governance of organizations

ISO 37000 – Participation at a glance

ISO 37000 – Governance of organizations

I n t e r n a t i o n a l S t a n d a rd s a re a n i m p o r t a n t
ISO’s Strategy t o o l t o s u p p o r t t h e s h i f t t o w a rd s a m o re
s u s t a i n a b l e f u t u re .

Economy

Urgency for Trade &

sustainability Uncertainty

Environment Drivers of Technology

change
Changing
behaviors and Impact of
expectations digital

Society

ISO - Drivers of change

14
 ISO 37000 – Governance of organizations

ISO Strategy 2030

PLAN SDGs CONTRIBUTION
In 2015, the UN set an By supporting its members to Economic, environmental and
ambitious 15-year plan to maximize the benefits of societal dimensions are all
address some of the most international standardization and directly addressed by ISO
pressing issues faced by the ensure the uptake of ISO standards. Organizations and
world, in particular ending standards, ISO is promoting and companies looking to contribute
poverty, building economic supporting to meet the United to the SDGs, will find that
growth and meeting social Nations Sustainable Development International Standards provide
needs, including education, Goals (SDGs). effective tools to help them rise
health, social protection, and to the challenge.
job opportunities, and tackling
CLIMATE ACTION
climate change and ISO is committed and supports
environmental protection. the climate agenda and goals.

ISO - Sustainable Development Goals ISO - Strategy 2030 15

ISO London Declaration
ISO 37000 – Governance of organizations

ISO at a glance – Support of the UN SDGs

ISO Standards’ contribution to the UN Social

Development Goals

346 537 2935 501 181 559 836 2450 12734

514 2371 2624 1101 285 1053 161 1

ISO - ISO in figures 16

ISO 37000 – Governance of organizations

Why adopt ISO

37000?

17
 ISO 37000 – Governance of organizations

Integrated governance
The standard provides terminological clarity, consistency, and requisite differentiation
across an integrated organizational governance framework . This strengthens culture,
resilience, and value generation and facilitate the achievement of purpose and
sustainable development.

P U R P O SE, I N T E GRAT ION O F G OV E R NIN G B O DY,

STA K E HO LDERS, P U R P O SE, N AT URAL G OV E R NIN G G R O U P S ,
U LT IMAT E VA LUE E N V IRONM ENT, A N D AC C O UNTA BILIT Y
S O C IAL SYST E MS

VA LUE S , E T HICS ,
D I RE CT A N D C O N T RO L SYST EM,
P R O CE S S E S,
E N GAG E W I T H A S S URANCE , R I S K
P E R FOR M A NCE
ST R AT EGY G OV E RNAN CE
M EA S UR EM ENT

18
 ISO 37000 – Governance of organizations

Governance Architecture
P U B L I S H E D S TA N DA R D S W I T H I N S C O P E O F I S O / TC 3 0 9 E X A M P L E S O F R E L AT E D
S TA N DA R D S b e y o n d TC 3 0 9
GOVERNANCE

ISO IEC 38500 - Information

technology — Governance of
ISO 37000 - Governance of organizations IT for the organization
etc.

Example: Management of Values, Ethics and Compliance: ISO 27000 - IT

ISO 31000 –
Security
ISO 37301 -
MANAGEMENT

Risk
management
Compliance management systems management
systems

ISO 37302 - ISO 31010 - ISO 26000 –

ISO 37001 -
Whistleblowing management Risk assessment Guidance on social
Anti-bribery management systems Techniques responsibility
systems
ISO 37000 – Governance of organizations

What people are saying “provides vital guidance”

Effective governance enables organizations to deliver on its purpose,

values and strategy. ISO 37000 provides vital guidance to achieve this “rigorous and systematic
and when used in conjunction with the principles of integrated
reporting, can drive accountability and improved decision-making that framework on governance”
supports efficient and productive business.

Charles Tilley, Senior Advisor, Value Reporting Foundation

“drive accountability and
improved decision-making”
Beginning with corporate purpose as its guiding principle, the ISO
37000 guidance provides a rigorous and systematic framework on the
governance of organizations. It is thoughtful and carefully crafted-- “relevant globally across a
and is relevant globally across a wide range of jurisdictions and
different organizational models. The 37000 guidance serves as wide range of jurisdictions
a valuable frame of reference for companies, boards, investors, and different organizational
policymakers, regulators and other governance professionals. models”
George Dallas, International Corporate Governance Network (ICGN)
20
ISO 37000 – Governance of organizations

ISO 37000 Highlights

• Governance of organizations
Overview
• The Primary and the
Foundational principles
• The Enabling principles

21
 ISO 37000 – Governance of organizations

Governance of organizations Overview

The ISO 37000 standard
distills governance into 11 core
principles that are at the heart 4 Foundational governance
of any successful organization. principles

1 Primary governance
principle 6 Enabling governance
principles

Key governance outcomes

22
ISO 37000:2021(en), Governance of organizations — Guidance
 ISO 37000 – Governance of organizations

The Primary and the Foundational principles

1. Purpose

2. Value Generation
1 Primary governance
3. Strategy
principle
4. Accountability
4 Foundational
5. Oversight
governance principles

23
ISO 37000:2021(en), Governance of organizations — Guidance
ISO 37000 – Governance of organizations
The Primary Principle

1. Purpose
ISO 37000 clarifies that the governing
body is responsible for defining and
elaborating a meaningful, relevant
organizational purpose as the reason the
organization exists and gives detailed
guidance on relevant practice.
It also makes clear that the governing body O rg a n i z a t i o n a l p u r p o s e s t a t e m e n t d e f i n e s ,
should define the organizational values as specifies, and communicates the ultimate value
the compass to guide how the purpose is t h e o rg a n i z a t i o n i n t e n d s t o g e n e r a t e f o r
achieved.
specified st akeholders.

24
 ISO 37000 – Governance of organizations
A Fo u n d a t i o n a l P r i n c i p l e

2. Value Generation
Organizations don’t generate long-term value
that achieves the organization’s purpose or
avoids harm by chance.
ISO 37000 establishes the responsibility of
the governing body role to clarify the value
generation objectives and to govern so that

A value generation model these objectives are met. This requires the
governing body to define a clear and
p ro v i d e s b a s i s f o r i n n o v a t i o n a n d c o l l a b o r a t i o n
transparent value generation model that
with st akeholders.
defines, creates, delivers and sustains
appropriate value.

25
ISO 37000 – Governance of organizations
A Fo u n d a t i o n a l P r i n c i p l e

3. Strategy
The governing body should direct and
engage with the organizational strategy, in
accordance with the value generation model ,
to fulfil the organizational purpose.
The governing body sets the strategic
outcomes, establishes governance policies
to guide the strategy development, and
T h e o rg a n i z a t i o n a l s t r a t e g y re f l e c t s t h e g o v e r n i n g
engages in strategic planning.
b o d y ’ s i n t e n t i o n s re g a rd i n g t h e o rg a n i z a t i o n ’ s
The governing body should actively and
achievement of the strategic outcomes within its
dynamically steer the strategy in way that
changing context.
balances value generation in the present
with value generation in the future.

26
 A Fo u n d a t i o n a l P r i n c i p l e ISO 37000 – Governance of organizations

4. Accountability
ISO 37000 clarifies that the governing body
is responsible for and accountable to the
organization as a whole.
Accountability at all levels is a key aspect of
governance. Accountability is established
through the assignment of, and agreeing to,
Accountability engenders trust and legitimacy , which
responsibility and the delegation of authority.
l e a d s t o i m p ro v e d o u t c o m e s . I t i s d e m o n s t r a t e d The governing body can delegate but should
t h ro u g h re p o r t s , d i s c l o s u re s , e f f e c t i v e s t a k e h o l d e r demonstrate its willingness to answer for the
e n g a g e m e n t , a n d a p p l y i n g i m p ro v e m e n t s . fulfilment of its responsibilities, even where
these have been delegated.

27
ISO 37000 – Governance of organizations
A Fo u n d a t i o n a l P r i n c i p l e

5. Oversight
ISO 37000 outlines the governing body’s
role and responsibility to effectively
oversee the organization.
For the first time ever, clarity is given at a
global level on the nature, elements of and
integration into organizations of the
internal control system and the assurance Oversight by the governing body includes ensuring
processes.
t h a t a n i n t e r n a l c o n t ro l s y s t e m i s i m p l e m e n t e d
and assuring itself that the governance system is
a p p ro p r i a t e l y d e s i g n e d a n d o p e r a t i n g a s i n t e n d e d .

28
 ISO 37000 – Governance of organizations

The Enabling principles

6. Stakeholder engagement 6 Enabling governance

7. Leadership principles

8. Data and decisions

9. Risk Governance

10. Social Responsibility

11. Viability and performance

over time

29
ISO 37000:2021(en), Governance of organizations — Guidance
ISO 37000 – Governance of organizations
An Enabling Principle

6. Stakeholder
engagement
ISO 37000 outlines why and how the
governing body should understand its
stakeholders, engage them in achieving
the organizational purpose through the
strategy, establish clear criteria to
determine the relevance of stakeholder
expectations, ensure effective relation- M e m b e r, re f e re n c e , a n d re l e v a n t s t a k e h o l d e r

ships are established and maintained, e n g a g e m e n t a re k e y.

and that expectations become an
effective part of organizational
decision-making.

30
 ISO 37000 – Governance of organizations
An Enabling Principle

7. Leadership
ISO 37000 clarifies that the governing body
should be values-driven and lead the
organization ethically and effectively and
ensure such leadership throughout the
organization and its external context. The
governing body should set the tone for an
ethical and values-based organizational
T h e g o v e r n i n g b o d y s h o u l d l e a d b y e x a m p l e t o c re a t e
culture.
a p o s i t i v e v a l u e s - b a s e d c u l t u re , s e t t h e t o n e f o r
others, and engender trust and mutual cooperation
w i t h t h e o rg a n i z a t i o n ’ s s t a k e h o l d e r s .

31
ISO 37000 – Governance of organizations
An Enabling Principle

8. Data and
Decisions
ISO 37000 outlines that the governing
body should recognize data as a strategic
and valuable resource for decision-
making by the governing body.

The governing body ensures that its own

T h e g o v e r n i n g b o d y s h o u l d e n s u re t h a t t h e
decision-making process and those of
o rg a n i z a t i o n i d e n t i f i e s , m a n a g e s , m o n i t o r s a n d
others in the organizations are ethical,
c o m m u n i c a t e s t h e n a t u re a n d e x t e n t o f i t s u s e o f d a t a .
responsible and effective.

32
 ISO 37000 – Governance of organizations
An Enabling Principle

9. Risk Governance
ISO 37000 explains that the governing body
sets the tone and shapes the culture for a
proactive and anticipative approach to the
management of risk across the organization.

The governing body ensures the systematic

assessment of risks and defines the risk
criteria, in particular the appetite for risk and
risk limits.
Va l u e i s g e n e r a t e d w h e n a p p ro p r i a t e r i s k i s
The governing body assesses, treats,
t a k e n , t r a n s f e r re d o r s h a re d i n a t i m e l y m a n n e r. monitors, and communicates the nature and
extent of the risks faced when making
This happens when the governing body balances decisions.
risk effectively.

33
 ISO 37000 – Governance of organizations
An Enabling Principle

10. Social
Responsibility
The governing body should ensure that
decisions are transparent and aligned with
broader societal expectations.
For an organization to act in a socially
responsible way, it needs to operate within
T h e o rg a n i z a t i o n s h o u l d p ro a c t i v e l y c o n t r i b u t e t o the parameters of acceptable behaviour and
sustainable development by generating value in a not allow actions that are legally or locally
m a n n e r t h a t m e e t s t h e n e e d s o f t h e p re s e n t w i t h o u t permissible but not in line with what is
c o m p ro m i s i n g t h e a b i l i t y o f f u t u re g e n e r a t i o n s t o expected of it by its broader stakeholders and
meet their own needs. society.

34
ISO 37000 – Governance of organizations
An Enabling Principle

11. Viability and

performance over
time
The governing body identifies, describes
and assesses the key resources and value
generation systems the organization
depends on to generate value, how these
W h e re a n o rg a n i z a t i o n f a i l s t o u n d e r s t a n d a n d
interrelate and how they are are used over
re s p o n d t o t h e n e e d s o f t h e s y s t e m s o f w h i c h i t i s a
time. It ensures that the organization
protects and restores the key resources and p a r t , i t i s u n l i k e l y t h a t t h e o rg a n i z a t i o n w i l l re m a i n

systems that it depends on or affects. viable and perform over time.

35
ISO 37000 – Governance of organizations

Key take-aways

36
 ISO 37000 – Governance of organizations

Key take-aways

ISO 37000 is the global benchmark for good organizational Governance:

Provides a clear compass is the tool to align all is the global benchmark
in key areas of good organizations world-wide to for good governance by
governance such as fulfil their meaningful all organizations. It
purpose, stakeholder purpose through creates transparency,
engagement, resource engagement with their reduces complexity and
stewardship, stakeholders and contribute builds trust in and across
accountability and to a sustainable world which organizations & society. It
oversight. respects the needs of future is the route to value
generations. generation for all
organizations.
37
ISO 37000 – Governance of organizations

Name

Contact details Picture

ISO 37000:2021 Governance of organizations - Guidance

Quicklinks: ISO - ISO/TC 309 - Governance of organizations
Committee Website: ISO - ISO/TC 309 - Governance of organizations

38