Risk Management, Governance & Policy, Leadership Development
1 minute read
Feb 3, 2022
Written by: Shawn Sweeney
One of the hottest regulatory buttons coming into 2022 is environmental, social and governance (ESG) risk. In recent years, we’ve seen how the choices banks have made in investing in these areas or supporting clients with aligning missions have directly impacted their bottom line.
Now that focus on ESG is driving shifts in how organizations manage internal and external processes; it’s extending all the way to their financial reporting. With that spotlight intensified, this is the time for you to understand and define your organization’s story – then own how you share that story with your different audiences, as I advised in a recent Forbes Finance Council discussion.
To start, be transparent with your investors, customers and employees around ESG reporting. In particular, these groups are looking at diversity, equity and inclusion (DEI), not to mention climate change mitigation and carbon neutrality; both of these areas have financial and non-financial reporting implications.
ESG reporting allows you to demonstrate what is important to you and where you are shifting your resources to support these priorities. Consider how to tell your stories not only internally, but particularly externally, as consumers are increasingly making buying decisions – which means bringing their money to your bank – based on values alignment.
Forbes Finance Council experts recently offered seven tips on how to adapt to the growing influence ESG is having on financial reporting processes and resource allocation. Check out their insights and be ready to tell your ESG story.
If you’ve spent any time in the last ten years in or around compliance, you’ve likely heard about the “three lines of defense” (3LOD) model – business units are primarily accountable for compliance and are considered the first line; the compliance team is the second line, checking the work for the first line; and internal audit operates as an independent third line assessing the first two lines. While the model has been widely accepted (and in most cases expected by regulators), the approach has been gaining some critics. The growth of the FinTech industry has caused many to question how viable and applicable the 3LOD model is for smaller organizations. While the concept is solid, it’s time to adapt the model to account for the wide array of organizations now operating in Financial Services.
Risk Management & Regulatory Compliance 2 minute read
We all like to think we have our credit-scoring models in check. But do we? When was the last time you reviewed the modeling data and validated the performance? I mean really reviewed it – not just checked the annual review box before audit season?
Risk Management & Regulatory Compliance, Change Management, Governance & Policy 3 minute read
The heart of an organization is within the policies that declare what it is and what it believes. To many people, those policies are about setting limits, which automatically means minimizing risk because there’s not much room to step out of line.
Risk Management & Regulatory Compliance, Capability Delivery, Governance & Policy 2 minute read
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