Essay About Risk Mitigation And Audit Committee

Risk Mitigation for Financial Institution
Essay Preview: Risk Mitigation for Financial Institution
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Mitigate the Risk in finance Risk mitigation planning is the process of developing options and actions to enhance opportunities and reduce threats to project objectives. Risk mitigation progress monitoring includes tracking identified risk, identifying new risks, and evaluating risk process effectiveness . Establish reporting and incident management systemEffective report and intake procedures Speak up training for manager & employees Notification protocol Effective investigation protocol, including for investigatorsEffective remedial measures and appropriate way to track and communicate discipline before it occursReporting and communication Internal controls, testing and auditingAnti-corruption Expense reports, foreign consultant, supplier contracts, due diligence, background checks, recent hires, marketing expenditures, intercompany transfers, accounts payable, compliance certificationsLIBOR situations Understand the processclear policy and proceduresfiduciary disclosures: 1) trade group involvement 2) industry “best practice” projects 3) multi-employer situations email and communication reviews establish firewalls Make culture a strategic priorityAccess your cultureCultural surveysBenchmark reportingExit interviewsConduct a program reviewDetermine stakeholder communication preferences and expectationsIdentify opportunities to drive program awareness like training, communication and internal marketing Training managers to encourage “Speaking Up” by Welcoming the complaint or report with words and body languageBreak down hierarchical reporting habitsTaking the time to listenActive listening, asking questionsShowing the employee they careUnderstanding of importance of contacting compliance immediatelyLetting the employee know what is going to happen and that you will follow up with the employeeBeing professional, respectful and thankfulRetaliation will not be tolerated Reporting rates rise when ethical commitment is perceived to be strongerThe training value proposition Catch misconduct earlyEmpower potential reporters and give them an alternative to the government Send the employer’s messageHelp create an ethical cultureEstablish legal defensesInternal auditThe BOD or audit committee and senior management must support and actively oversee the internal audit function The internal audit function must be independentThe internal audit function must be risk based and focus on higher risk areasAudit findings and planned responses should be communicated to the BOD or audit committeeA tracking system that includes the audit findings, corrective actions taken, and time frames for completion should be incorporated into the reporting function.Cyber securityFailure to provide adequate security can have dire consequences for a financial institution. Risk managers therefore need to maintain a comprehensive understanding of the threats along with their institutions exposure and vulnerabilities. It is a best practice to seek external consultation regarding loss control efforts, risk mitigation.Protecting reputational riskReputational risk is the potential that negative publicity regarding and institution’s business practice, whether true or not, will cause a decline in the customer base, costly litigation or revenue reductions. It is impossible to accomplish with 100 percent effectiveness, however, minimizing the potential damage with proper planning, policies and procedures is possible.