Best Practices in Operational and Credit Risk Management

Introduction

This course will aim to equip managers and executives with no prior background in Risk Management and/or Enterprise Risk Management with the basic foundation to understand risk categories, mainly Credit and Operational risks fundamentals. This course will enable attendees to develop their skills and knowledge in relation to major risk areas that they have to deal with while running the business in order to enable them to effectively carry out their pertinent duties in a highly professional standard.

Objectives

By the end of this course, participants will be able to:

• Discover how to mitigate various risks at work
• Understand fundamental risk management concepts
• Determine whether a company is financially high or low or at risk
• Upgrade their operational risk management practices
• Integrate Operational Risk within Corporate Governance
• Differentiate between Operational Risk & Risk-Based Audit
• Be aware of the importance of strong internal controls

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

This course is suitable for a wide range of professionals but will greatly benefit:

• Managers or Senior Officers with a diversified background looking to learn the fundamentals and taxonomies of Organizational Risk Management
• Operational Risk Directors, Managers & Staff
• Quality Assurance Managers
• Operations Managers
• Compliance Officers and Staff
• Internal Auditors & Regulators
• Senior staff members of any department or organizational leaders who make key business Decisions

Course Outline

Session One: Governance Triangle; Risk Management, Internal Audit & Compliance

• The Fundamental Differences and Importance of its Convergence
• Overlapping: Healthy or Wasteful?
• Cooperation & Collaboration among these functions/Business Units
• Corporate Governance “CG”; what is it about?
• Business Benefits of Integrating CG Activities

Session Two: Risk Management Taxonomies

• Enterprise Risk Management
• Fundamental Concepts of Enterprise Risk Management
• What is Risk About?
• International standards for ERM
• ERM Implementation Challenges
• Financial/ Credit Risk
• Market Risk
• Operational Risk
  • Key Risk Indicators vs. Key Performance Indicators
  • Business Continuity Plan vs. Disaster Recovery Plan​

Session Three: Financial & Credit Risk

• Credit risk mitigation techniques
• Financial Analysis for credit purpose
• Key financial terms and their role in company finance
• Concentration Risk Analysis
• Obligor Risk Rating (ORR) & Facility Risk Rating (FRR)
• The core principles of market risk management
• Liquidity risk management
• Maturity Ladder - Current & Cumulative Gaps
• Assets & Liabilities Management ALM & ALCO; Objectives and Scope
• Value at Risk (VaR)​

Session Four: Operational Risk Framework

• Four actions of risk management: identity, assess, mitigate & monitor
• Objectives of operational risk management
• Responsibilities of operational risk management:
  • developing a risk awareness culture
  • developing operational risk management procedures
• Operational risk management techniques:
  • Self-assessment
  • Benchmarking effectiveness of controls
  • Allocating operational risk costs
  • Awareness of adherence to Basel
• Structure of the Basel Accord; Pillar 1, 2 & 3
• The basic indicator approach
• The standardized approach
• The advanced measurement approach​

Session Five: Risk Management in the Context of Corporate Governance

• Corporate Governance; Definition, Concept, Rules, Principles
• Corporate governance and the role of the Board of Directors and Management
• Effective Executive Management & Board Members
• The added value of corporate governance
• Barriers/obstacles that prevent the full implementation of CG
• External & internal parties involved in the governance process
• Governance Committees; Audit committee and Risk committee
• Three lines of defense​

Session Six: Effective Risk and Control Self-Assessment

• Definition and rules for RCSA: who does it, how to form the group, how to conduct the debates and expected outcome
• Tool: Impact/probability matrix: define the axes, define risk appetite and colors, position risks and impacts on a PI matrix
• Usage and choice when defining RCSAs: extreme cases or median cases, distribution or single points, inherent or residual risk, likelihood or frequencies
• Risk rating: when and how. Take the rating for what they are: indicative but not precise. Differentiate between qualitative and quantitative ratings.
• Highlight and assess your top risks​

Session Seven: Other Important Risks

• Sovereign Risk / Political Risk
• Legal Risk
• Reputational Risk
• HR Risk
• Non-Compliance Risk
• Fraudulent Risk​

Session Eight: Wrap up; Recommendations for a Successful GRC

• Build good Risk Management processes with responsibilities and accountabilities
• Conclusion and augmentations
• Open Discussion