BIS Review 20/2006  3  involvement of the board of directors, especially since it is widely accepted that the board is ultimately responsible for the operations and soundness of a bank 8 . Without disclaiming the ultimate responsibilities of the board of directors, the responsibility for the effective management of the bank’s compliance risk resides with the bank’s senior management.
One of the most important responsibilities of senior management with regard to compliance is to make sure that the main compliance risk issues an institution is facing, are identified and assessed on an annual basis. Subsequently, senior management - with the assistance of the compliance function - has to ensure that plans are prepared to manage these risks.