8.3 Components of an effective compliance management framework

Question 1

What is the purpsoe of a compliance management framework?

Answer 1

To ensure compliance with internal policies and procedures, as well as laws and regualtions and any standards or codes such as ISO 31000.

Question 2

The compliance standards specific to an organisation are a combination of which two types of standards?

Answer 2

The standards imposed on the organisation via laws and regulations and the standards imposed by the organisation to meet its own objectives.

Question 3

What does “ALARP” stand for in the context of risk management?

Answer 3

as low as reasonaly possible

Question 4

An organisation may decide that it’s employees must comply absolutely with standards and processes, or it may tolerate a small amout of non-compliance if this can be j_______.

Answer 4

justified

Question 5

To ensure that the agreed compliance standards are enforced wihin an organisation, three processes and controls are required:

• compliance management p_______- and p________
• compliance reporting and e___________
• compliance training and c____________

Answer 5

policies and procedures
escalation
communication

Question 6

What should a compliance management policy contain?

Answer 6

• expected compliance standards and principles
• links to key compliance procedures
• reporting/escalation arrangements
• roles and responsibilities

Question 7

What is a “risk-based compliance” approach?

Answer 7

An approach targeting areas of greater risk over those of lower risk, ensuring that the most risky activities are most closely monitored.

Question 8

What are the purposes of a dedicated compliance function in larger organisations?

Answer 8

• keeping up to date with legal and regulatory changes
• communicating with external agencies such as the FCA
• monitoring the effectiveness of compliance procedures and controls
• reporting to managers and the board
• working with others to ensure issues are rectified quickly
• coordinating training and communication.

Question 9

What is the role of boards and risk/audit committees in compliance management?

Answer 9

The board is accountable for the effectiveness of compliance management, and can be held criminally accountable (e.g. corporate manslaughter). The board also approves any policies and procedures.

Question 10

What is the role of the company secretary in compliance management?

Answer 10

Working with the compliance function to ensure that the board has the assurance information it needs.