Lack of Compliance Focus Puts Your Business Strategy at Risk
If compliance isn’t treated with the care regulators require, the credit union will not achieve its strategic goals.
By Eileen M. Iles and Niall Twomey|June 15, 2018 at 09:00 AM
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Credit unions striving to manage their compliance risk are well-served to consider its importance within the overall enterprise risk management (ERM) process of their entire organization. Those that view compliance management as one of their most important obligations will positively affect their business strategy, and those that don’t are putting their business at risk. Line-of-business leaders who understand the role that compliance management plays in strategy and how compliance risk affects it will be well-positioned to help their credit unions grow and prosper.
To better understand the importance of compliance to a credit union, it helps to put the compliance role in context. In the development of a business strategy, credit union senior leadership conducts strategic planning to determine the best approach to grow the business. As part of the planning, strategic objectives should take risk management into account. These decisions cannot be made without an effective ERM framework. ERM is a process developed by an entity’s board of directors, management and other personnel that is applied strategically to identify potential events that might affect the entity and help it manage risk within its risk appetite. ERM provides reasonable assurance regarding the achievement of the entity’s objectives, including an organization’s compliance risk.
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