[OR] [RBI] [16] Disclosure and Reporting

Enhancing Transparency Through Operational Risk Management Disclosures

Adequate public disclosure of Operational Risk Management (ORM) information fosters transparency and encourages industry-wide improvements. By sharing relevant data, regulated entities (REs) can promote better practices within their organizations and across the industry through market discipline and peer comparisons. Here are vital considerations for professional organizations regarding ORM disclosures:

Principle 16: Comprehensive Disclosure and Reporting

Comprehensive disclosure and reporting are essential for ensuring an organisation's transparency, accountability, and informed decision-making. This involves providing detailed and accurate information about financial performance, operational activities, risk exposures, and compliance with regulations. Adequate disclosure helps stakeholders, including investors, regulators, and customers, understand the organization’s current status and future outlook, fostering trust and confidence. Comprehensive reporting also supports internal governance by highlighting areas requiring attention or improvement, enabling better risk management and strategic planning. Ensuring that disclosure and reporting are thorough and timely is crucial for maintaining regulatory compliance and upholding organizational integrity.

Importance of Tailored Disclosures

Disclosures must be aligned with an RE’s size, risk profile, and complexity. The information shared should enable stakeholders to evaluate whether an RE effectively manages its Operational Risk while ensuring that the disclosure process does not create additional risks, such as exposing control vulnerabilities.

Disclosure Policy and Governance

To manage ORM disclosures effectively, REs should have a formal disclosure policy that is regularly reviewed by Senior Management and the Board of Directors. This policy should guide the organization in determining the nature and scope of disclosures and ensure appropriate internal controls over the process.

Reporting and Continuous Improvement

REs should also establish direct reporting mechanisms with supervisors and auditors to allow ongoing review of their ORM framework. This enables continuous development through monitoring, comparing, and evaluating their ORM practices, ensuring consistent improvements aligned with industry standards.

By adopting comprehensive and well-governed disclosure practices, REs can enhance their risk management processes, contribute to industry transparency, and improve operational resilience.

More Information About Blended Learning OR-5000 [OR-5] or OR-300 [OR-3]

To learn more about the course and schedule, click the buttons below for the OR-3 Blended Learning OR-300 Operational Resilience Implementer course and the OR-5 Blended Learning OR-5000 Operational Resilience Expert Implementer course.