Shaping Risk Culture to Support Compliance in Banks
An executive working in financial compliance, Gerald Michael Shaw is also the managing director of two hedge funds with over $60 billion in assets under management. Gerald Michael Shaw is the global compliance officer for Dominion Bank and was instrumental in the design and adoption of its compliance program.
A key element of any institution’s compliance practices is the organizational culture. Often neglected as a direct target of compliance programs, risk culture plays a huge role in compliance.
Shaping risk culture, then, is an important part of compliance. There are practical ways to shape risk culture in an institution. One way is to develop and implement process walkthroughs of compliance risk-assessments to reveal risks inherent in various operations.
Another strategy is to incorporate a change-management process that flags significant operational changes to the second line, thereby outlining areas of potential risk. In risk management parlance, the first line of defense against risk is at an operational level, the second line is compliance management, and the third is internal audits. Ultimately, creating a tool kit to measure risk objectively is one of the most important things that should be done.
A key element of any institution’s compliance practices is the organizational culture. Often neglected as a direct target of compliance programs, risk culture plays a huge role in compliance.
Shaping risk culture, then, is an important part of compliance. There are practical ways to shape risk culture in an institution. One way is to develop and implement process walkthroughs of compliance risk-assessments to reveal risks inherent in various operations.
Another strategy is to incorporate a change-management process that flags significant operational changes to the second line, thereby outlining areas of potential risk. In risk management parlance, the first line of defense against risk is at an operational level, the second line is compliance management, and the third is internal audits. Ultimately, creating a tool kit to measure risk objectively is one of the most important things that should be done.
