The Development of the Role of Compliance Function Over the Last Decade

RUNNING HEAD: - Risk Management 0
RISK MANAGEMENT
Module Number

Risk Management 1
Table of Contents
Answer to question no-1............................................................................................. 1The development of the role of compliance function over the last decade.............1
Answer to question no-2............................................................................................. 4
A Risk Management Process.................................................................................... 4
Answer to question no- 3............................................................................................ 7
Current approach to recruitment, vetting and training of senior staff in key roles
at
EveryFirm International (EI) is not acceptable....................................................7
Answer to question no- 4.......................................................................................... 10
Letter illustrating role of recruitment, vetting and training activities in supporting
compliance and risk culture.................................................................................. 10
Introduction........................................................................................................ 10
Role of recruitment, vetting and training activities in supporting compliance...10
Training and qualifications good practice...........................................................11
The culture of an organization...........................................................................11
Recommendations regarding the recruitment of the interim head of compliance
and risk.............................................................................................................. 12
Conclusion.......................................................................................................... 12
Bibliography............................................................................................................. 13

Risk Management 2
Answer to question no-1
The development of the role of compliance function over the
last decade
The corporate governance program helps in strengthen the legal compliance program and helps
in meeting the applicable rules and regulation in business. Generally the significance of effective
governance, risk management and compliance is well recognized, but there are large differences
present and how unfair it needs to be managed. By using the effective governance program,
company could easily mitigate the uncertain risks of the business. The day to day, and multiple
functions and their departments present and business organizations may handle GRC operations,
but overall it is very important that the board should own and driest GRC strategy. The creation
of the correct environment for mitigating risk, optimizing performance in protecting the brand of
the company starts from the top. It provides the basis for the development of the right GRC
culture in the organization, which allows each member of the organization to understand the role
that he or she has to play in companywide compliance and activate integrity and embodies the
values of the organization.1 In order to succeed, the business organization should be capable of
anticipating potential risks and remain protective, while involving the internal and external
environment. In the GRC operation, compliance officer needs to spot the uncertain issues and
risk faced by organization to strengthen the overall objectives and goals. In this regard, the
development that has taken place in role of compliance can be described as follows:
Compliance with internal policies and external regulations: It will be fair to claim that the
organizations cannot be too compliant, but they always face the risk of breaching the internal
1 Maphanga, Godrey Cyprian and Osden Jokonya, "The Risk Of Users’ Negative Behaviours
Influence On Information Security Compliance Policy In Organizations" (2017) 7(4) Risk
Governance and Control: Financial Markets and Institutions

Risk Management 3
rules or policies face potentially dire consequences as a result of the breach of external
regulations. The compliance failure may not be willful, and it can be the result of the lack of
awareness and understanding among the employees.2 Due to this reason an excuse is not
available for inadequate communication and training among the employees. There is a need for
robust operational management and governance. However, after claiming so it is also significant
that an exclusively reactive approach. It should not be adopted by the corporations regarding
compliance and regulation. The strong identity of a corporation depends on the long-term vision
and strategy of the company, which is highlighted by the culture of compliance and integrity.
However, to achieve this in practice, there is the requirement of actively identifying and
managing the risk areas on a regular basis.3 This helps in mitigating the business risk and also
helps in strengthen the overall outcomes throughout the time4.
Sometimes, compliance is considered as a necessary activity, but the activities that takes away
the attention of the board from revenue-generating activities and the growth of the company. It is
true that GRC underpins such activities. If the top-level management is not actively related with
protecting the business, the brand and assets of the company against a risk, it means that the
company has been exposed to exactly the factors that may obstruct the growth. On the other
hand, strategic GRC is always capable of supporting brand of the company by creating
credibility among regulators and policymakers as well as the customers and investors.
2 Hooghiemstra, Reggy and Hans van Ees, "Uniformity As Response To Soft Law: Evidence
From Compliance And Non-Compliance With The Dutch Corporate Governance Code" (2011)
5(4) Regulation & Governance
3 Roy, Amitava, "Corporate Governance Compliance, Governance Structures, And Firm
Performance" [2017] SSRN Electronic Journal
4 The Board Managment Nexus in Corporate Governance", in SSRN Electronic Journal, , 2010.