Post 10 July

10 Steps to Implement a Compliance Risk Assessment Framework

1. Establish Governance and Accountability
   • Define Roles and Responsibilities: Secure senior management and board support to highlight the importance of the compliance risk assessment. Clearly define the roles and responsibilities of stakeholders, including the CCO, compliance team, and business units.
2. Develop a Risk Assessment Policy
   • Create a Formal Policy: Develop a policy outlining the purpose, scope, methodology, and frequency of risk assessments. Obtain approval from senior management and communicate the policy to relevant stakeholders.
3. Identify Compliance Obligations
   • Legal and Regulatory Requirements: Compile a comprehensive list of applicable legal, regulatory, and contractual obligations. Establish a process for monitoring regulatory changes and updating the list as necessary.
4. Define Risk Criteria and Scoring
   • Criteria Selection: Define criteria for assessing compliance risks, such as likelihood of occurrence, potential impact, and regulatory scrutiny.
   • Scoring System: Develop a scoring system to quantify and prioritize risks based on these criteria.
5. Conduct Risk Identification
   • Gather Information: Collect data from internal audits, compliance reports, regulatory filings, and employee feedback. Engage with stakeholders, including business unit leaders and compliance officers, to identify potential risks.
6. Assess and Prioritize Risks
   • Evaluation: Evaluate each identified risk based on the defined criteria and scoring system.
   • Prioritization: Prioritize risks according to their severity and potential impact on the organization.
7. Develop Risk Mitigation Strategies
   • Action Plans: Develop strategies and action plans to mitigate high-priority risks. This may include policy updates, training programs, process improvements, and additional controls.
   • Resource Allocation: Allocate resources and assign responsibilities for implementing these strategies.
8. Implement and Monitor Controls
   • Implement Controls: Put the identified controls and risk mitigation strategies into practice.
   • Continuous Monitoring: Establish processes to continuously monitor the effectiveness of controls and identify emerging risks.
9. Document and Report
   • Comprehensive Documentation: Maintain a risk register documenting identified risks, assessments, mitigation strategies, and control measures.
   • Reporting Mechanisms: Develop regular reporting mechanisms to update senior management and the board on the status of compliance risks and mitigation efforts.
10. Review and Improve
    • Regular Reviews: Conduct periodic reviews of the risk assessment framework to ensure its relevance and effectiveness.
    • Feedback and Improvement: Collect feedback from stakeholders and use it to continuously refine and enhance the risk assessment process and framework.