Operational Risk Control Review
Operational Risk Control Review (ORCR) is the process of ensuring that operational risk controls are effective and efficient in both design and operation. The review is carried out purely to determine what controls are in place to manage risks within a firm. The review will not take into consideration an operational risk management framework nor what good corporate governance around the multiple interlocking processes of operational risk management already exist.
Having a documented operational risk policy allows senior management to communicate to all staff the approach of the firm to operational risk management along with having a clear policy for management to follow. As such, the policy should be approved by the executive management.
The aim is to improve the effectiveness of a Firms assessment processes through the application of risk management and internal audit assessment workshops.
ORCR’s assessment is simple for Firms of all sizes and types, from small companies with a single risk manager, to large multi‐national Firm with a group risk management function and international teams of auditors.
Types of ORCR
There are a variety of way to perform an Operational Risk Control Review
Elmore Review
Elmore review the documented critical objectives and processes together with an independent validation of internal assessements already
Worship Review
Alongside senior management, Elmore work to identitfy and agree the key business risks and effectiveness of internal controls to combat them.
Internal Review
Elmore provides the framework for business managers to draw their detailed knowledge of the business to identify the risks and to agree on their management.
Variety of ways an ORCR can be carried out:
- Workshops – very effective but needs one full day of management time for best results
- Interviews – an effective approach but can take more time to get agreement from all parties
- Questionnaires – the fastest approach, but most difficult to ensure cohesiveness to the wide-ranging results
ORCR’s are a fundamental part of operational risk management. Although there are many hurdles to carry it out well including the right fit between any consultant and the management team engaging them, implemented correctly there can be great results for a firm.
The best implementations of ORCR provide real business benefit when they are fully supported by the Board and senior management of the firms involved.