What are the common challenges and pitfalls of operational risk governance and how can you overcome them?

A concerted effort needs to be applied across 3LOD to ensure governance of ORM is fit for purpose and doesn't duplicate responsibilities. Typically an ORM governance would be owned/managed by the front line to ensure accountability with participation from risk as 2nd line challenge and oversight. Audit would provide input and insights as independent assurance providers.

To address operational risk governance challenges, establish a clear framework defining objectives, scope, and stakeholder roles. Communicate and align this framework with strategic goals and organizational culture for effective execution and oversight of ORM activities. Clarify responsibilities for risk identification, assessment, mitigation, and reporting to mitigate confusion, duplication, and conflicts. Consistent reinforcement and alignment with risk appetite are essential for robust ORM implementation.

Operational risks like any risk or threat needs to be managed by having access to regular, relevant information that gives actionable intelligence which facilitates decision making based on what is actually going on. many operational risk frameworks rely on assertions of process performance and subjective (RAG) ratings. These can give an illusion of control when, in reality defects, malfunctions, mistakes and malicious activity are going unnoticed. Having data that highlights these issues and provides a "direction of travel" provides for more effective governance & oversight

Operational risk governance often faces challenges due to a lack of clarity and alignment within organizations. Ensuring that all stakeholders have a clear understanding of the risk management framework and are aligned with organizational objectives is crucial. For instance, implementing regular communication channels and training programs can enhance awareness and alignment, fostering a unified approach to operational risk.

I see the issues holistically by understanding the triggers which causes operational risks and broadly speaking it emanates from people ,process ,system and internal external events ! Again, priority of the triggers list to be figured out as which is start which can take care of other triggers except external events which are not in our control. People is well competent and driven with highest level of professionalism, sense of ownership, belongingness,then to a greater extent it can take care of process or system related challenges including internal factors . Also , if people is having market insights ,can be bit ready for external event driven risk as well although it will not be full proof solutions!

If you don't have the data, it's tougher to make informed decisions. You may still be right....but you won't know until you observe the outcome.

The insufficiency of relevant data and tools can hinder effective operational risk governance. Investing in robust risk management systems and leveraging advanced analytics can mitigate this challenge. For example, utilizing data analytics to identify patterns and trends can enhance the accuracy of risk assessments, enabling organizations to make informed decisions based on comprehensive information.

Como especialista em data science e informática da saúde, atuo para garantir que os dados e as ferramentas utilizados na governan?a de risco operacional sejam puros, adequados e precisos. Isso inclui a defini??o e análise de dados, a valida??o de modelos e a sele??o de ferramentas apropriadas para a gest?o de risco. Exemplo: Como Consultor de Projetos, apliquei métodos para mitigar os riscos para a implementa??o de sistemas informáticos, o que incluiu a análise de dados e a sele??o de ferramentas apropriadas para garantir a precis?o e a eficácia dos sistemas.

Challenge: Poor-quality data and lack of proper tools. Solution: Invest in advanced risk management software, ensure data quality, and provide staff training. Example: Implement an integrated risk management system for real-time analytics.

Knowledge gap amongst employees could also be a risk. To Foster effective implementation and mitigation of operational risks every member should be aware of risk and mitigants

Overcoming the challenge of insufficient skills and resources in operational risk governance requires a multifaceted approach that combines investment in training, resource allocation, senior management buy-in, and cross-functional collaboration. Addressing this challenge not only fortifies an organization's risk management capabilities but also safeguards its operations and reputation in an increasingly complex and uncertain business landscape. By building the necessary skills and resources, organizations can navigate operational risks effectively and seize opportunities for growth.

lack of necessary skills and resources for effective risk governance. Organizations can overcome this challenge by investing in training programs and recruiting professionals with expertise in risk management. By building a skilled workforce and allocating sufficient resources, organizations can enhance their ability to identify, assess, and mitigate operational risks successfully.

Como especialista em qualidade e seguran?a do paciente, garanti que as competências e os recursos necessários para a governan?a de risco operacional estejam disponíveis e sejam utilizados adequadamente. Isso inclui a forma??o e o treinamento de equipes, a sele??o de fornecedores apropriados e a gest?o de recursos. Exemplo: Como Analista de Riscos, Qualidade e Tecnologia, apliquei melhorias diretas nos fluxos de trabalho, o que incluiu a forma??o e o treinamento de equipes para garantir que elas tivessem as competências necessárias para gerenciar riscos e garantir a qualidade e a seguran?a do paciente.

Challenge: Lack of skilled personnel and resources. Solution: Develop training programs, hire experienced professionals, and allocate sufficient resources. Example: Create a budget specifically for risk management training and hiring.

Organizacional culture and empowerment from top management is a key to transforme a good paper framework in a efficient Risk Management

Encouraging a culture of continuous improvement and demonstrating the benefits of change is vital. Leadership plays a crucial role in fostering a positive attitude towards risk management enhancements. Offering incentives and showcasing success stories can help overcome resistance, creating a more adaptable and resilient operational risk management framework.

Como especialista orquestrador de transforma??o organizacional, atuo para promover mecanismos que supere a resistência à mudan?a e à melhoria na governan?a de risco operacional. Isso inclui a promo??o de uma cultura de melhoria contínua, a comunica??o efetiva das vantagens da mudan?a e a gest?o da resistência à mudan?a. Exemplo: Como Gerente de IT e Projetos, implementei a cultura de dados e a transforma??o digital, o que incluiu o envolvimento organico da equipe, a identifica??o e recompensa dos promotores, e a comunica??o efetiva das vantagens da mudan?a e a gest?o da resistência à mudan?a para garantir o sucesso da implementa??o.

?? 9 Pitfalls to Avoid: 1. Tunnel Vision: Focusing solely on immediate risks while neglecting emerging ones. 2. Data Blindness: Ignoring the power of data analytics to predict and prevent issues. 3. Siloed Structures: Information locked away in departments hinders holistic risk assessment. 4. Paper Tiger Policies: Policies gathering dust without training and accountability. 5. Overkill Bureaucracy: Processes so cumbersome they stifle agility and responsiveness. 6. Communication Gap: Lack of clear, consistent communication across all levels. 7. Resistance to Change: Fear of the unknown hindering the adoption of better practices. 8. Reactive Mindset: Waiting for incidents to happen before taking action. 9.Neglecting Human Factors.

Além dos desafios e armadilhas mencionados acima, assim como as maneiras de superá-los, existem outros fatores a serem considerados na governan?a de risco operacional, como a falta de aten??o às mudan?as no ambiente externo e a falta de integra??o entre as diferentes fun??es da organiza??o. Para superar esses desafios, é importante manter-se atualizado sobre as tendências e as mudan?as no ambiente externo e promover a integra??o e a colabora??o entre as diferentes fun??es da organiza??o. Exemplo: Como Gerente de Opera??es, implementei processos de integra??o de clientes e fornecedores internos. Estávamos sempre atentos às mudan?as no ambiente externo, para garantir que a organiza??o esteja sempre em conformidade e à frente da concorrência.

it's crucial to consider the dynamic nature of risks. Regularly reassessing and updating risk frameworks, staying informed about industry trends, and actively engaging with relevant regulatory changes are essential. Flexibility in adapting risk management strategies to evolving circumstances ensures that operational risk governance remains effective in the ever-changing business landscape.