07 Nov 2008, David Benyon, Operational Risk & Regulation
LONDON – Changes to operating models, and strategies for risk and compliance, represent the key lesson to be learned from the financial crisis. This is according to an event survey by risk and compliance software and consultancy firm Protiviti.
Changes to operating strategies and models were highlighted by 37% of respondents – senior risk and compliance managers – while the importance of changes to remuneration policies was flagged by 2%. Only 2% highlighted extended stress-testing scenarios for the Financial Services Authority’s (FSA) internal capital adequacy assessment process (Icaap) as their key priority.
The FSA is expected to publish new revisions to its Icaap regime for risk-based capital assessment, and also indicated its intention to supervise remuneration policies through its “Dear CEO” letter to chief executive officers in October.
Jonathan Jesty, a director at Protiviti, says: “Our survey shows that the biggest challenge in the minds of risk and compliance professionals is to how to get a strong risk management culture and awareness back into the business and the boardroom after years of complex technical regulatory change which has probably resulted in too much dependency on the control functions. Changes to remuneration principles and Icaap can be important tools of course, but the survey confirms there are more fundamental, business issues to be addressed.”
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