The Most Important Compliance Best Practices You Need to Know

The variety and complexity of risks facing today's organizations is increasing due to emerging technologies, globalization, and increased compliance obligations. The financial market breakdown of 2007/08 has emphasized the importance of risk management in creating and protecting stakeholder value. As the economy continues to struggle, focus of stakeholders has shifted from simple risk management to overall Governance Risk Compliance (GRC).  The Dodd-Frank Act, focus on FCPA along with whistleblower rules are examples of why firms should focus on more holistic approaches to their GRC and Enterprise Risk Management (ERM) programs.

The uncertain environment in which businesses operate today - constantly changing regulations,expanding global footprints, volatile market conditions, unpredictable socio-economic upheavals as well as natural disasters - has made it increasingly necessary for organizations to ensure they have a robust and effective system to manage operational risks. These risks cannot be discounted by the modern, international organization - the cost of ignoring them can be catastrophic in terms of reputational and financial damage. This white paper details five best practices that organizations can adopt in order to manage operational risks more effectively.

The Advanced Measurement Approach (AMA) framework seeks effective governance, risk capture, assessment and quantification of operational risk exposure. Banks have the freedom though, to develop operational risk measurement and management programs, processes, and tools that are appropriate to their activities, business environment, and internal controls.

This article details the elements that have to be included in a model framework and the best practices for compliance.

Risk appetite is a key element in the successful execution of risk management programs. This article explains how companies can develop, monitor and communicate risk appetite.

The UK Financial Services Authority (FSA) created the Advanced, Risk-Responsive Operating Framework (ARROW) framework to:

1. identify main risks to FSA objectives;
2. measure the importance of those risks;
3. mitigate those risks, depending on size; and
4. monitor and report on the progress of the complete risk management process.
    

This article provides best practices companies can follow in order to comply with the ARROW framework.

ISO 14971(Application of Risk Management to Medical Devices) recommends using Preliminary Hazard Analysis (PHA) as an important tool for risk control. PHA is an analysis at macro level.

In this article, medical device expert Dev Raheja describes the best practices to be followed when conducting Preliminary Hazard Analysis when manufacturing devices.

Business continuity is a key operational and risk management consideration for financial institutions such as banks. But what are the strategies that banks should follow in order to ensure that there is no unnecessary disruption to their daily operations?

Read this article to find out how banks can implement business continuity strategies and the best practices they can follow.

Banks are failing at an alarming rate and the number of problem banks continues to rise. Shareholders and taxpayers are shouldering the brunt of the losses and, as a matter of recourse, the FDIC and shareholders groups are suing the directors and officers of failed banks for negligence and mismanagement. In order to provide protection against the risk taking that has led to failed bank litigation, financial institutions must take sufficient steps to manage and mitigate the human factor risks that have contributed to the crisis.

Author Profile:

Tyler D. Nunnally is the Founder & CEO of Upside Risk Corporation, a behavioral risk management consultancy that helps organizations to maximize profit while mitigating risks inherent in human judgment. He currently serves on the Board of Directors of the Technology Association of Georgia (TAG) International Business society.

 

The present article delineates Judgment Risk Indicator which is a behavioral -based risk assessment that enables clients to gain strategic and competitive advantages by identifying and developing top talent. It also provides the JRI snapshot report to help clients making better informed pre-employment hiring decisions. The article additionally provides Judgment Risk Indicator Matrix which illustrates a person’s overall assessment results when their Judgment Bias and Risk Appetite scores are shown together. The present paper also provides valuable answers to some most frequently asked questions.

Author Profile:

Tyler D. Nunnally is the Founder & CEO of Upside Risk Corporation, a behavioral risk management consultancy that helps organizations to maximize profit while mitigating risks inherent in human judgment. He currently serves on the Board of Directors of the Technology Association of Georgia (TAG) International Business society.

 

Although governance, risk and compliance are separate factors, they each have a significance, relevance and influence on each other. Governance is the umbrella term used to describe the overall framework through which the senior executive management ensure that their organization follows appropriate processes and policies to meet the required standards. Risk Management is the process through which an organization identifies and resolves the gap between the current operational standards and the required operational standards. Compliance is the process that records and monitors the controls, be they physical, logical or organisational, needed to enable compliance with legislative or industry mandates as well as internal policies. Governance, Risk, and Compliance are highly related but distinct activities that solve different problems for different sets of constituents of an organization. Covergence or risk covergence refers to the methodology offered by consulting organizations which brings together the efforst of risk and control assessment groups. GRC convergence is achieved when all assessment groups come to a consensus on the tools, practices, frameworks, common languages and software tools to assist in assessment and reporting. There are no mandated path to achieving complete convergence but following best practices can help realising the desired results.

In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order. Risk management should:

• create value.
• be an integral part of organizational processes.
• be part of decision making.
• explicitly address uncertainty.
• be systematic and structured.
• be based on the best available information.
• be tailored.
• take into account human factors.
• be transparent and inclusive.
• be dynamic, iterative and responsive to change.
• be capable of continual improvement and enhancement.