Highlights from RMA’s 12th Annual Governance, Compliance, and Operational Risk Conference (GCOR)

On April 18, Edward J. DeMarco Jr., General Counsel and Director of Operational Risk at RMA, welcomed attendees to a sold-out GCOR XII in Boston. Throughout RMA’s twelfth annual Governance, Compliance, and Operational Risk Conference, industry experts discussed their views on conduct risk and third-party risk management, with an emphasis on the role of culture.

In a thought-provoking keynote address, Vanessa Allen Sutherland, chairperson, U.S. Chemical Safety Board (CSB), shared insights and lessons learned from the CSB’s root-cause investigations of the 2005 BP refinery explosion in Texas and the 2010 Deepwater Horizon oil rig explosion. The address focused on the role of corporate governance and boards of directors in defining an organization’s safety culture and refining its safety management systems.

“Safety and prosperity are not mutually exclusive,” remarked Sutherland. “Strong safety programs are critical for economic prosperity, reputational success, and for the industries that we oversee and with which we interact.”

Spyro Karetsos, executive vice president and head of Enterprise Risk Services, SunTrust Banks, delivered the conference’s opening address, entitled, “Cracking the Code on Risk Appetite in Business and in Life.” He said the journey begins by evaluating where you stand today compared to where you want to be. Karetsos, the chair of RMA’s Operational Risk Council, compared the self-evaluation to what a person who wants to get into better shape would do. “You have to be honest with yourself,” he said, “and see yourself as others see you.”  

Linda Tuck Chapman, president, Ocala Performance Solutions, said that, unfortunately, many community banks currently “don’t have enough people” for a mature third-party risk management program. Interestingly, she said, the banks with the “richer processes” are mid-tier institutions, because there is “not so much to handle that they can’t wrap their hands around it.” At the biggest banks, she said, there are so many third-party relationships that they seem to “involve everybody in the first and second and third lines every day of week.”

With so much to review, said Tuck Chapman, author of the recently published RMA book Third-Party Risk Management: Driving Enterprise Value, banks need to prioritize relationships to make sure the most important ones get the attention they deserve and resources are not wasted reviewing relationships that are not critical.

The conference also featured presentations on risk appetite, operational risk in new product development, cybersecurity, end-to-end processes and products, blockchain, cyber risk and insurance, the three lines of defense, examining the SMA, and more.

A more detailed article on the highlights of GCOR will be published in the July-August issue of The RMA Journal.

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