Once a particular business line has identified and assessed its compliance risks, it can design policies, detailed day-to-day procedures and processes, and associated risk-mitigating internal controls. The corporate compliance function plays an important role in advising business line managers as they assess risk. Such counsel adds to consistency in approach and helps control for mis-estimated risk.
The corporate compliance function's involvement also increases the organization's ability to aggregate and better understand risks across the organization. Understanding of risk helps both the business lines and the compliance function develop internal controls that are reasonably designed to mitigate the risk. While the industry trend toward more-consolidated compliance risk management is a favorable development, it is critical that business line management remain engaged.