Day Three of the RMA Governance, Compliance, and Operational Resiliency Conference featured lively discussions on best practices in effective operational risk management. Panelists debated cyber risk strategies, the role of risk management in dealmaking, and innovative approaches to cultivating and retaining talent.
Be sure to join us Thursday for the second Model Risk Management Summit and final day of GCOR XVI. Model risk experts will discuss reporting on model risk in the aggregate, governance of model overlays and underlays, and oversight of non-model tools. When you join the sessions live, you can also interact with our panelists and your RMA colleagues.
Here are some key takeaways from GCOR XVI, Day Three.
Re-recruit existing employees. Executives and mid-level career professionals are making career decisions based on a different set of values after the pandemic. The “Talent Show: Effective Human Capital Risk Strategies” panel discussed new approaches to human capital leadership in the post-lockdown hybrid environment. Demonstrating a vibrant, flexible culture is key to attracting great talent, the panelists agreed, and requires an emphasis on active listening, empathy, and creative approaches to breaking the Zoom cycle.
These skills are also important for retaining existing employees. “If we have strong talent, but maybe they've been in their role for three to four years, how do we continue to engage them?," asked Aprille Savarese, EVP of risk management at Zions Bancorp. "We need to understand not only where our employees and leaders are today, what their capabilities are, and what their skill set is, but quite frankly, what their passion is," said another panelist.
Ultimately, talent leaders are seeking new sets of skills and experiences to fill critical roles. “Technical skills are the price of admission to get the interview. It's not what gets you the job,” said Paul Gibson, partner at Heidrick & Struggles. “Can someone be strategic? Can they demonstrate an enterprise view? Can they drive change?”
Boards are anything but boring. Before he actually became a corporate board member, Dean Yoost used to picture the experience as “a placid walk down the fairway with an occasional lunch and a pretty easy job.”
“That hasn't proven to be the case,” said Yoost, who is currently on the boards at MUFG Union Bank and Pacific Life Insurance Company, and is an advisory committee member with American Honda Finance Corporation. Instead, due to growing regulatory expectations and rapid transformations in technology and society, Yoost and board members everywhere—particularly in financial services—are challenged to digest masses of information while navigating an increasingly complex landscape.
“Boards have a serious responsibility,” said Yoost, “and the expectations are very high.”
Much more is expected not only of the board, he said, but of the second line of defense. “Boards need insights and information from risk management functions”—which make sure boards are up to date on all manner of current risks, and as informed as possible about the risks on the horizon, Yoost said.
In the GCOR session “Managing Up: Supporting Board Oversight of New and Emerging Risks,” Yoost and co-panelist Caroline N. Swett, counsel and member of Debevoise & Plimpton’s Financial Institutions Group, discussed best practices for risk officers regarding their board reporting responsibilities, particularly in the context of some of today’s most significant risk issues. “Every board member needs to remain informed and current,” Yoost said.
Leverage the AORG to solve problems. RMA’s Advanced Operational Risk Group (AORG) promotes the continued improvement of advanced operational risk management and capital adequacy practices. AORG conducts regular practice-sharing exercises, fosters dialogue with U.S. federal financial services regulatory agencies, and shares industry views on the implementation of operational risk regulation.
In a panel discussion, “Women in Risk: Highlighting the Maturation of the Operational Risk Discipline Through the Advanced Operational Risk Group,” AORG members shared how the group has influenced practices and processes at their institutions.
AORG participants praised the convening power of the group, which serves as an incubator of ideas. “We have this circle of trust where we can share very freely our thoughts and challenge ourselves in the most respectable way that we can.” said Regina Desler, senior vice president, operational risk analytics, loss data, scenario analysis, and reporting for Northern Trust.
AORG brings quantifiable value to RMA member banks who participate. “Banks can really get a broader understanding of the range of practices and emerging risks in the industry by engaging in this working group,” advised Ni Kenney, senior business director of Capital One Financial.
Reminder: If you neglected to download your CPE credit after a session, CPE certificates are available an hour after the close of each session and for the rest of the conference.
- GCOR XVI, DAY 1: Climate Risk and Opportunities
- GCOR XVI, DAY 2: Assessing Emerging Risks; Managing Non-Financial Risks
- GCOR XVI, DAY 3: Retaining Talent; Training Boards
- GCOR XVI, DAY 4: Taking Inventory of Model Risk