As the business landscape evolves, so do the risks. The challenge for risk and audit professionals is to not only keep up with, but also anticipate and understand, how new risks can impact their business.
Two leaders in risk and compliance gathered at Diligent’s recent 2021 Modern Governance Europe event to discuss just that. Ezekiel Ward, founder of North Star Compliance Ltd and Daniel Connell, partner at Deloitte, joined the event to discuss risk management implications, regulations and how to report back to the board.
Risks Vary from Business to Business
According to Connell, the COVID-19 pandemic is hard to ignore for any business — even those who have enjoyed an upside. Though other risks can vary business-to-business, both Connell and Ward agree that sustainability is front-of-mind for organisations around the world.
“The standout for the past sort of 24 months or so has really been around climate risks,” Ward says. “I think clients are realising and board members are realising, the power of ESG [environmental, social, governance] and what we do to structure that around integrated risk management.”
Effectively Prioritising Risk Requires Working Cross-Functionally
According to Connell, the real challenge in risk management is prioritising which risks to address and when. Connell says that the most effective organisations collaborate across different stakeholder groups including legal, tax, finance and compliance.
“When you see businesses that work in that sort of structured, cross-functional way, those tend to be a group staff,” Connell says. “They maintain that nimbleness. Because, obviously, the real challenge here is that risks are not static and how you prioritise is not static.”
Automation Can Create a Culture of Improvement
Organisations are collecting more data than ever before. But Connell says not all of that data is put to good use. Automation tools like Diligent Operational Governance can help organisations take control of their data to create improvements.
“A lot of that comes back to some underlying legal entity data that actually hasn’t been used and analysed in the way that it could do,” Connell says. “Groups [are] now sitting up and [saying,] ’With all of this data here, we’ve got some really smart people both internally and on the advisor side. Let’s revisit how we can get better value from it.’”
Get Down to Business When Presenting to the Board
Board members are busy people. What’s more, they might not know as much about the company as risk and audit professionals think they do. Ward recommends focusing on the choices boards have to make.
“You need to get down to the actual decision point pretty quickly,” Ward says. “And if that’s an internal investigation, then it’s things like the timing of self-disclosure, who to involve locally, whether to conduct something under privilege. All those key decisions. That’s where the time I think needs to be spent.”
Strengthen Your Compliance Program Through People, Processes and Technology
According to Connell, a strong culture of compliance is built cross-functionally. This spans people, processes and technology, all of which touch stakeholders in law, tax and compliance.
“Understand from a people perspective, do you have the right human capital, within your function, to make the most of that?” Connell says. “From a process perspective, do you understand what those processes are and where some of these opportunities to harmonise are? And then, finally, from technology, really make sure you’re keeping on top of some of just that huge advancement.”
Watch the full session to learn more about Ward and Connell’s take on keeping up with the dynamic risk management landscape.
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