Gaining competitive advantage through governance, risk and control best practice
An avalanche of regulation has swept across the financial services industry and the breadth of compliance being demanded of an international business is now significant. With the credit crunch continuing to take a growing number of victims it is imperative that financial institutions reappraise their enterprise-wide control and governance systems and hierarchies.
In order to shed some light on the progress of major financial institutions in developing governance and control systems, Deloitte has carried out a research study on actual operational data from 32 major financial institutions from around the globe.
A key issue for financial institutions is the lack of clarity in the taxonomy around governance and control. This opacity of definition is causing, on occasion, a failure in strategies. For the purpose of this research Deloitte has defined governance, risk and control as:
A process, implemented by the board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of business objectives in the following areas:
- Maintaining compliance with applicable laws and regulations
- Safeguarding the assets of the organisation
- Promoting the effectiveness and efficiency of operations, including the effective management of risk
- Ensuring the reliability of financial reporting.
The key to success lies in the more coherent risk and control systems with appropriate governance structures spanning all related procedures. An interesting consequence of this could be a further spur to consolidation within the industry. Cutting the Gordian knot of governance, risk and control is likely to confer significant business benefits.
Please download the full report “ In control? Gaining competitive advantage through governance, risk and control best practice” (PDF, 228 KB) to view the complete results of our research.