What steps have you taken to mitigate your Firm’s Conduct Risk?

Codes of conduct and ethics have been in place within companies for many years. They outline expected standards of behaviour for the firm and its employees. Regulators no longer accept that simple codes are sufficient to control the risk of bad conduct, which results in customer or market detriment.

Regulators have not clearly defined the term Conduct Risk

To make matters more difficult, regulators have not clearly defined the term Conduct Risk, yet it appears in many regulator consultation papers and risk outlooks. One thing that is clear, is that regulators expect firms to have controls and processes in place to manage conduct risk.

So what is "Conduct Risk"?

Conduct risk, in a nutshell,  is the threat of financial loss to an organisation caused by the poor judgement of managers and employees which ultimately results in poor outcomes for its customers.

How do we identify and mitigate Conduct Risk?

Conduct risk services tailored for your Firm

We will consult with your Firm to identify and map your conduct risk universe and appropriate and proportionate mitigants. Our knowledge of effective governance arrangements, coupled with our well-honed skills in compliance risk management, allows us to help you design a top-down approach that enables your Firm to understand and control conduct risk.

This could include:

Identify Risks

  • Help to identify the conduct risks in your business
  • Advise senior management on how to control these risks 

Governance Structure

  • Advising on the design of an effective governance structure
  • Create committee terms of reference 

Apportion Responsibility

  • Advise on the appropriate allocation of responsibility across the three lines of defence

Outcomes Testing

  • Update compliance documentation to manage conduct risk
  • Create monitoring programmes that test for stakeholder outcomes 

Independent Review

  • Review and report on conduct risk frameworks
  • Carry out independent outcomes testing

If conduct risk is a risk class that continues to mystify your Firm, leaving you wondering where to begin or questioning the effectiveness of your approach, then CCL can help.

We have a team of knowledgeable consultants with experience in conduct risk management attained from years of working in international regulatory regimes. CCL can help you define, design and implement your conduct risk management framework or review the arrangements that you currently have in place.

We have a dedicated team of experienced compliance consultants who can provide expert assurance and peace of mind. Get in touch to see how we can help your Firm.