Unit 1 / Section 3 - The GRC Context Flashcards Preview

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Flashcards in Unit 1 / Section 3 - The GRC Context Deck (7)
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1
Q

What does the Open Compliance and Ethics Group’s (OCEG) definition of GRC argue?

A

That GRC adds value by helping firms to understand the real-life problems that can inhibit its achievement of optimised value.

2
Q

GRC means all the processes within a firm that must function together effectively to ensure…

A

Maximised sustainable, agile, long-term, compliant and responsible performance.

3
Q

How can “Risk Culture” be defined?

A

By the system of values and behaviours, collectively called the culture, which affects the firm’s risk decisions.

In practical terms, employees need to understand firm-wide risk exposures. The risk culture is created by risk management training, risk assessment and guidance about decision-making. It involves risk policies as well as risk statements and procedures.

4
Q

How is “Compliance Culture” defined?

A

The overall environment that affects how compliance issues are handled.

In a strong compliance culture, employees follow the right processes and perform the right controls, even without oversight. In practical terms, it refers to how effective a firm is in meeting compliance regulations and deterring and detecting compliance problems.

5
Q

How is “Governance Culture” defined?

A

The attitudes and actions that lead to the building of a strong and competitive firm that enhances shareholder value.

It involves the strategic direction of a firm, and how this strategy is embedded into business practices and leadership capabilities at every level.

6
Q

What 3 regulatory objectives does enforcement action taken by any regulator help to demonstrate?

A

That they:

1) Protect consumers
2) Drive stability and therefore confidence in the markets
3) Promote market integrity

7
Q

** What are the 3 GRC cultural elements?

A

> Risk Culture - affects risk decisions
Compliance Culture - affects how issues are handled
Governance Culture - attitudes and actions affecting strategy