Managers should not be rewarded solely on the basis of profits, but audit findings and compliance status should also be considered while deciding bonuses and compensations. Sound operational risk governance practices rely mainly on the following lines of defense: i. Business line management is the first line of defense against operational risk.
Business line management is responsible for identifying and managing risks in the products, activities, processes and systems for which they are accountable. It is important that clearly documented and regularly updated operating manuals are readily available to all employees. Segregation of duties needs to be ensured.