Issue 11: The Risks of Praising Dictators on LinkedIn
MBK Search
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Welcome to Issue 11 of This Week in GRC, MBK Search’s digest of the week in governance, risk, and compliance.
The Opening Bell:
There’s much to be said about the banality of LinkedIn posts. They can be a den of cringe and humblebrags, as LinkedIn Lunatics can attest.
But as terrible as those posts are, at least they’re not openly praising Adolf Hitler.
A now former risk advisor for Deloitte India rightly caught the ire of the internet this week for a LinkedIn post praising Hitler as an “action taker” from whom we could “all learn from”.
Needless to say, his tenure at the Big Four shop was short. We think it had something to do with the quality of his risk assessment.
LinkedIn lunacy aside, it was another busy week in GRC. Let’s explore.
Newsbits:
How should banks and auditors get along?
In the wake of the banking crisis, more attention has been paid to the role of internal audit teams. But with many seeing auditors as just an “extension of the regulators,” the question of what an ideal relationship is becomes more important.
Every week, MBK Search’s GRC Story explores one of the big issues shaping our industry. This week’s story explores the thorny issue of bank/auditor relations, and what the future holds. It also features typically sharp analysis from Richard Chambers :
1: Is AI the right tech for risk management?
As politicians and regulators scramble to make sense of artificial intelligence, many now think the tech will become more common in financial institutions.
This piece from the FT explores how some banks are embracing AI. Its ability to analyze vast amounts of data various sources can improve things like credit risk assessments and stress testing exercises.
But questions remain about the tech’s complexity, regulatory challenges, and privacy concerns.
For institutions often criticized for relying too much on legacy tech, this is huge.
2: Is this the end of riskless assets?
Food for thought from John Heltman in American Banker this week, looking at whether risk weighting is the best way to assess different types of assets.
Even the safest assets of them all, treasury securities, felt the brunt of this year’s banking crisis. Heltman suggests that the leverage ratio might provide stronger insight for assessing risk.
But there’s no such thing as a free lunch.
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"Risk-weighted and leverage-based capital requirements are designed to work hand-in-hand, and in the best of times they do. But perhaps one innovation that can come out of the current crisis is doing away with the concept of 'riskless' assets entirely — certainly some assets are riskier than others, but nothing — and I mean nothing — is entirely risk-free."
The full piece is behind a paywall, but Heltman is leading a discussion on LinkedIn here.
3: How to engage stakeholders in risk conversations without overwhelming them
LinkedIn’s Risk Management Community has been producing useful guides for a while, but this piece on engaging non-risk stakeholders in risk talks is on point.
It outlines various ways risk teams can demystify the world of risk management without getting too heavy on the detail.
In an industry awash with jargon and technicalities, it’s never a bad thing to pull back the curtain, particularly in times of uncertainty.
4: The scariest “R” word: Recall
A pertinent question raised by MBK’s own Director of Med-Tech Jan Triani about why quality only gets talked about when someone slips up:
5: Will the UK nationalize AI?
Big talk this week in the UK about the role in regulating and controlling artificial intelligence. But is such talk even viable, or just political hot air?
6: Why project managers need self-sufficient risk management
A really interesting perspective on the latest episode of the “riskologist” podcast, talking about the benefits project managers have of maintaining a self-sufficient style of risk management:
7: Assessing the cost of compliance in 2023
Thomson Reuters Regulatory Intelligence has released its 14th annual Cost of Compliance report. The key headline is that compliance officers are expecting to operate with limited sets of resources, but managing a growing list of risks.
This episode of Thomson Reuter's Compliance Clarified podcast explores the report in depth, and you can read the full take here.
And remember, you can see our full list of open GRC vacancies on our website.