A career in governance, risk and compliance
Why choose a career in governance, risk and compliance?
Why choose a career in governance, risk and compliance?
Ensure Effective Risk Management
Compliance as a discipline was traditionally thought of as ensuring adherence to the many rules and regulations organisations face. But compliance is now about so much more: culture, ethics, advice – modern compliance really is at the heart of the business.
Compliance professionals not only navigate a complex regulatory environment but also add a key commercial perspective. They enable the right business to be conducted in the right way and help firms achieve success by using systems and controls to ensure effective risk management.
IT Governance, Risk & Compliance extends the GRC concept to include cyber security, data privacy and technology, integrating IT risk management into an organisation’s strategy.
The term compliance describes the ability to act according to an order, set of rules or request.
In the context of financial services businesses compliance operates at two levels.
Level 1 - compliance with the external rules that are imposed upon an organisation as a whole
Level 2 - compliance with internal systems of control that are imposed to achieve compliance with the externally imposed rules.
Corporate governance is a highly inclusive concept that covers a number of different aspects about the way in which an organisation is managed, directed and governed.
It can be described as a set of relationships between a company’s management, board, shareholders, and other stakeholders, which provides the structure through which the objectives of the company are set. Furthermore it provides the means of attaining and monitoring performance against those objectives.
The term ‘regulation’ generally refers to a set of binding rules issued by a private or public body with the necessary authority to supervise compliance with them and apply sanctions in response to violation of them.
Although there is no unified theory of financial services the key objectives of regulation is as follows.
Effective regulation is regulation that:
Primary legislation refers to the Law, Act or Ordinance passed by the legislative of a particular jurisdiction.
The legislature in many jurisdictions has the power to delegate or subordinate law making powers to other agencies that may then make delegated or subordinate legislation often referred to as “secondary” legislation. In the context of financial services, secondary legislation is generally legislation that has been drafted by a regulatory body empowered to do so pursuant to the primary law by which it is established.
Codes generally set out the broad principles by which a regulated business is expected to conduct its business.
Rules are generally very detailed and relate to every regulated activity and function.
Guidance can either be in the form of a statement of best practice or a statement of minimum best practice.
Occasionally a regulatory authority will feel compelled to issue detailed guidance to regulated businesses on how it expects them to actually discharge their legal and regulatory obligations. Anti money laundering and terrorist financing is one area where most regulators around the World have issued guidance.
In broad terms regulators fulfill the following seven functions:
Many regulators adopt a risk-based approach to supervision and follow a process of supervision that can be divided into the following four steps:
There are essentially two methods by which compliance with regulatory rules is monitored – onsite supervision and offsite desk based supervision.
Conduct of business rules govern the manner in which a business conducts itself in its relationships with consumers. Conduct of business rules impose minimum standards of acceptable conduct upon regulated businesses.
Enforcement is a necessary product of the process of authorisation and supervision, in the sense that a regulator must enforce compliance with rules. Enforcement is as much about investigating, gathering and sharing information as it is about imposing penalties.
Enforcement generally entails the following: