As organizations navigate the complexities of the ever-changing business landscape, risk, compliance, and audit leaders face significant challenges in making informed decisions and driving their organizations forward. Resolver’s expert duo, Pooja Azhalavan and Ben Bradley share insights from their webinar, “The 10 Must-Have Reports for Risk, Compliance, or Audit Leaders” and their work helping customers optimize their Enterprise Risk Management (ERM) programs.
From incident management to tracking regulatory changes and everything in between, discover how accurate risk management reporting offers actionable intelligence to turn risks into opportunities. Let’s explore the 10 essential reports they recommend for data-driven decision-making and supercharging your risk management into risk intelligence:
1. Risk Tolerance Report
Purpose: Communicate the acceptable level of variation in pursuing objectives.
Benefits: Facilitate strategic discussions and identify areas of focus.
The Risk Tolerance Report communicates the acceptable level of variation that management is willing to allow for specific risks as the organization pursues its objectives during the risk management reporting process. It helps identify areas that require attention and improvement, facilitating strategic discussions at the executive level.
This report provides a risk level analysis that an organization is comfortable with and can handle in pursuit of its objectives. It considers factors such as the organization’s risk appetite, financial capacity, and strategic objectives, then establishes different risk tolerance levels for various types of risks. A Risk Tolerance Report serves as a reference for risk management reporting, providing a basis for risk metrics and key risk indicators (KRIs) that can be regularly monitored to assess risk exposure against established tolerance levels. It guides leadership teams to make informed choices around capital allocation and investment strategies that align with the organization’s risk tolerance.
2. High-Velocity Risks Report
Purpose: Identify and communicate areas of focus, encourage action on emerging risks, and convert risks into opportunities.
Benefits: Spot upward trends in risks, mitigate emerging risks, and capitalize on opportunities.
The High-Velocity Risks Report is a critical tool for organizations operating in fast-paced environments or industries with rapidly evolving risk landscapes. This report aggregates risks to identify consistent and upwardly trending exposure, enabling timely risk mitigation. It also evaluates the organization’s preparedness to respond to high-velocity risks, which allows leadership teams to encourage proactive action on emerging risks by examining the effectiveness of existing strategies and contingency plans.
3. Regulatory Obligations by Regulator Report
Purpose: Communicate compliance levels by a regulator, discuss areas of focus for control spend, and identify areas of non-compliance.
Benefits: Ensure compliance with regulatory requirements and prioritize mitigation efforts.
Breaking down obligations by regulators, jurisdictions, and compliance levels, this report helps ensure control effectiveness and reduces non-compliance risks by mapping each regulatory obligation to the corresponding business operations or processes affected, providing an assessment of the organization’s compliance status. Communicating the regulatory status to key stakeholders and discussing areas that require control spend are vital components of risk management reporting.
4. New Regulatory Obligations Report
Purpose: Understand and communicate increased regulatory burden, and justify investment in horizon scanning capabilities and new controls.
Benefits: Stay informed about changes in regulations and allocate resources effectively.
For accurate risk management reporting, it is imperative to continuously track and communicate new or updated obligations, regulatory guidance, or upcoming changes to the executive and the wider business. The New Regulatory Obligations Report assesses the potential impact of new regulatory obligations on the organization and helps organizations stay aware of the ever-changing regulatory landscape. This justifies investments in horizon-scanning capabilities and new controls which are critical to risk management reporting.
5. Audit Plan Report
Purpose: Communicate audit coverage, identify gaps, and ensure budget matches capacity.
Benefits: Ensure adequate audit coverage and resource allocation.
The Audit Plan Report outlines upcoming audits, objectives, and scope, and serves as a blueprint for auditors to conduct a systematic and comprehensive assessment of an organization’s processes, controls, and financial statements during the risk management reporting process. It holds the first and second lines of defense accountable and ensures sufficient coverage. Organizations can avoid potential gaps in coverage and capacity issues by having a clear and comprehensive audit plan.
6. Internal Audit Findings Summary Report
Purpose: Identify and communicate control failures, and ensure accountability through assigned corrective actions.
Benefits: Improve control activities and drive accountability for corrective actions.
Providing an overview of identified control failures and success stories from audit programs and testing activities, the Internal Audit Findings Summary Report helps prioritize improvement efforts, drives accountability, and ensures the timely resolution of critical issues.
7. Risk Incident Management Report
Purpose: Understand control failures and risk exposure, communicate financial loss, justify investment with near misses, and prevent future exposure.
Benefits: Identify root causes of incidents, track financial losses, and improve control effectiveness.
Risk incident management allows teams to understand control failures and risk exposure. This report outlines the nature of incidents, their impact, the response taken, and measures implemented to prevent similar incidents from occurring in the future. By capturing and tracking incidents, organizations can prevent further exposure and justify investments in controls by tracking near misses.
8. Centralized Control Reporting
Purpose: Identify critical controls across three lines of defense, spot duplicate controls, and reduce “audit fatigue.”
Benefits: Enhance control effectiveness, eliminate duplicate efforts, and optimize resource allocation.
The Centralized Control Report is key for risk management reporting as it enables the identification of critical controls across all three lines of defense, spotting duplicate controls, and reducing “audit fatigue.” It aggregates control-related data to assess the overall risk exposure of the organization and includes key control performance metrics such as control effectiveness, control testing results, control deficiencies, and remediation status. Visualizing interconnected risk and control data through relationship graphs facilitates a more streamlined and standardized approach to control monitoring and risk management reporting, enabling better decision-making.
9. Program-Wide Issue Summary
Purpose: Understand key issues with high impact across three lines of defense, discuss and prioritize spending.
Benefits: Drive risk-based decision-making, prioritize risk mitigation efforts, and align with strategic objectives.
This report highlights key issues with high impact across an enterprise-wide risk program, enabling discussions and prioritization of resources. It also highlights any interdependencies or cross-impacts between different issues, escalated issues, and the status of actions and progress made to address them. Understanding how issues impact the organization helps make critical decisions aligned with strategic objectives, which is key to risk management reporting.
10. Objectives & Strategy Report
Purpose: Tie risk posture to strategic objectives, provide a unified message to the board by all three lines and drive a risk-based culture.
Benefits: Align risk management with strategic goals, gain executive buy-in, and enhance decision-making.
This report ties risk posture to strategic objectives, providing a unified message to the board from all three lines of defense in risk management reporting. It fosters alignment among stakeholders, empowers employees, and ensures that the organization’s efforts are directed strategically to achieve its long-term business objectives. This helps create a risk-based decision-making culture and ensures a seat at the decision-making table.
Benefits of targeted risk management reporting
Creating reports with specific stakeholders in mind allows risk, compliance, and audit leaders to provide targeted insights and communicate at an appropriate level of understanding of risk management. Reporting also assists with understanding the needs of the board and each stakeholder ensures that risk reporting is beneficial and contributes to informed decision-making across the organization.
By leveraging these essential reports and dashboards, and adopting a holistic approach to risk management reporting, organizations can empower risk, compliance, and audit teams to make data-driven decisions, ensure regulatory compliance, and achieve strategic alignment. With Resolver’s Risk Intelligence platform, risk leaders can integrate and report on their three lines of defense, providing better visibility to senior leaders and securing a strategic seat at the decision-making table. Watch the webinar replay now and embrace the power of risk management reporting to turn risks into opportunities and more reliably achieve strategic objectives.