Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

ASIC urges companies improve compliance risk management

australian-securities-and-investments-commission/ASIC/James-Shipton/compliance/risk/

3 October 2019
| By Laura Dew |
image
image image
expand image

Australian Securities and Investments Commission (ASIC) chair James Shipton has urged a ‘sense of urgency’ be applied by companies to their non-financial risks, including compliance risk.

In a speech in Sydney, Shipton said he found boards were being ‘challenged’ by elements of non-financial risk management and that their oversight of this risk was ‘less mature than required’.

Non-financial risk included areas such as operational risk, conduct risk and compliance risk, although ASIC primarily focused on the compliance part.

Launching a Director and officer oversight of non-financial risk report, ASIC said it had examined almost 30,000 documents and interviewed 60 directors and senior executives.

“Boards cannot afford to ignore the oversight of non-financial risks. As we have seen, all risk can have financial consequences. If not well managed, non-financial risks carry very real financial implications for companies, their investors and customers,” said Shipton.

Within its report, the regulator found managements were operating outside of board-approved risk appetites for compliance risk and failing to effectively communicate the company’s risk position. Material information about non-financial risk was also often buried in dense board packs, making them difficult to identify.

Boards should actively hold management accountable for operating within stated risk appetites and take ownership of the form and content of information they received. The effectiveness of board risk committees could also be improved as they were being ‘underutilised’, ASIC said.

“We acknowledge that there are no ‘easy fixes’ to some of these issues. However effective oversight and management of non-financial risk is not novel or impossible. Companies have managed some of these risks well in the past and continue to do so today. We hope this review provides boards with a useful roadmap to achieve this,” Shipton added.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 week 1 day ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

1 week 4 days ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

2 weeks 4 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

2 weeks 6 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND