Enterprise Risk Management – Helping management to achieve oversight across the institution

 By Richard Pike, CEO, Governor

Richard, can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I have a number of roles at the moment. I am an independent non-executive director at four financial institutions (permanenttsb bank, JPMorgan fund administration, JPMorgan hedge fund administration and Citadel Europe), I teach risk and compliance management at various levels (bank director, MSc and diploma) and I am the founder and CEO of Governor Software. My real focus right now is on improving governance and oversight of risk and compliance within financial institutions.

What, for you, are the benefits of attending a conference like the ‘Operational Risk Management USA Congress’? What can attendees expect to learn from your session?

The Governor Software team and myself are really pleased to be taking part in Operational Risk Management USA Congress again this year.  I spoke at the event last year and had the opportunity to meet with so many interesting people from the industry and discuss what is currently impacting them be it regulations changes in technology or something as simple as the changing culture in their firm.

This year I will be providing a back to back presentation with Sasu Sihvonen, Head of Business Risk, Nordea – Sasu and I will both be discussing “Enterprise Risk Management – Helping Management to Achieve Oversight across the Institution” Sasu will provide the view from within the bank, and I will then widen the conversation to look at common issues we are hearing from financial firms across the EMEA and USA.  I will also reflect on my own experience as an NED for JPM Asset Management and permanenttsb bank and discuss the experiences I came across and why I developed Governor Software to provide me oversight in my roles.

Can you provide an overview of the issues you saw from meeting with banks across EMEA and the US?

One of the key challenges we see is the regulatory focus on individual/board responsibility and signoff. Banks are struggling to figure out how they can ensure excellent oversight so that their senior executives are able to signoff these responsibilities and still sleep at night. Currently too many banks are adding costs and risk through the use of external consultants, spreadsheets and ad-hoc processes to prove oversight.

How would you recommend institutions to overcome these issues?

The ability to prove good oversight needs to be designed into processes and frameworks from the beginning. An approach which formalized the oversight and senior management signoff is needed along with supporting resources and systems. You need to be able to map the obligations that your regulators and boards have defined to those policies and controls that exist in your business. Then you need a constant feed of information as to the operation of those controls and policies so that you can enable real time oversight.

What, in your opinion, are the key benefits of visually mapping and tracking obligations?

There are three key benefits

·         It enables you to communicate those obligations, and any changes, to the staff that need to know

·         It enables you to understand the status of your compliance with those obligations in real time

·         It enables you to evidence your compliance with those obligations as and when requested.

How do you see the risk landscape evolving over the next 6-12 months?

Obviously Brexit is the key risk on this side of the ocean.  The economic situation is showing signs of stress and I am concerned that we might see that start of a slow down in 2019. Apart from that, cyber and privacy would be my two key risks to be concerned about.