Learn key strategies for risk managers to communicate effectively with regulators and auditors, ensuring compliance and improving processes.

Quite frankly I would not engage directly with regulators as a risk manager, that’s why you have a compliance team. It’s their job along with the GC. Except of course in banks where the risk managers are compliance professionals pretending to be risk managers. And talking to auditors is always dangerous - whoever you are.

Last updated on Jul 3, 2024

Here's how you can effectively engage regulators and auditors as a risk manager.

Navigating the complex landscape of risk management requires more than just identifying potential hazards; it also demands effective communication with regulators and auditors. As a risk manager, your ability to engage with these external parties is crucial. They not only ensure compliance but also provide insights that can enhance your risk mitigation strategies. By understanding their perspectives and requirements, you can foster a collaborative environment that benefits your organization's risk management efforts.

1 Know the Rules

Before you can effectively engage with regulators and auditors, you must have a thorough understanding of the regulatory environment. This means staying current with all relevant laws, guidelines, and standards that pertain to your industry. By demonstrating that you are well-versed in these areas, you build credibility and trust. This knowledge also allows you to anticipate questions and provide comprehensive explanations, which can streamline the audit process and make regulatory interactions more productive.

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Mohammad Naiem Salem

Pharmaceutical Industry Development Unit Manager | GMP and GSDP Lead Inspector
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I think the best strategies for a more collaborative Risk Management process engaging with regulators and auditors: Be transparent and accountable. Be willing to share information with regulators and auditors, and be accountable for the effectiveness of your risk management program. Metrics and Reporting: Develop and track key risk management metrics, and report them regularly to regulators and auditors. This will help to demonstrate the effectiveness of your risk management program.

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Cris Nitz

Sustainable Value Innovation • Climate Strategy • Social Impact
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To effectively engage regulators and auditors as a risk manager, it's crucial to master the regulatory landscape through ongoing education and awareness of industry standards. This expertise builds credibility and facilitates productive interactions by anticipating inquiries and offering thorough explanations. Personalizing this knowledge with relevant examples enhances transparency and fosters collaborative relationships, ensuring compliance and mitigating risks effectively.

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2 Prepare Thoroughly

Prior to any engagement with regulators or auditors, ensure that all documentation is accurate and readily available. This includes risk assessments, control measures, incident reports, and any corrective actions taken. Being able to present a clear and detailed account of your risk management processes shows that you are proactive and committed to transparency. It also minimizes the likelihood of misunderstandings and demonstrates your organization's dedication to maintaining high standards of risk management.

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Cris Nitz

Sustainable Value Innovation • Climate Strategy • Social Impact
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Effectively engaging regulators and auditors as a risk manager begins with meticulous preparation. Before any interaction, ensure all documentation, from risk assessments to incident reports and corrective actions, is accurate and readily accessible. This proactive approach not only demonstrates transparency but also showcases a commitment to maintaining robust risk management standards. By presenting a clear and detailed account of processes, you establish credibility, minimize misunderstandings, and highlight your organization's dedication to compliance and risk mitigation.

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3 Communicate Clearly

Clear communication is the cornerstone of any successful engagement with regulators and auditors. Use plain language to explain your risk management strategies and how they align with regulatory requirements. Avoid jargon unless it is industry-standard and you are confident that the regulator or auditor understands it. Ensure that your explanations are concise yet comprehensive, covering all relevant points without overwhelming your audience with unnecessary details.

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Angela Page

Finance, Operations, Growth and Business Optimization Strategist
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Invest time and strategy in your documentation and communications. Full transparency, consistent definitions and simple ways to explain data flows are critical to make the job of your auditors easy. Auditors don’t expect everything to be perfect, but they want to be able to clearly understand your strategy and the risk management tools you have in place to guarantee transparency and compliance. If you do this right, even if your auditor comes across something that is unexpectedly out of place, it will be easier to explain how that happened. This will also simplify the design of remediation plans necessary to address gaps and prevent reoccurrences for identified issues.

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4 Foster Relationships

Building a positive relationship with regulators and auditors can make a significant difference. Approach interactions with a collaborative mindset, viewing these professionals as partners rather than adversaries. By establishing rapport and maintaining open lines of communication, you can create an environment of mutual respect and understanding. This can lead to more efficient and effective regulatory engagements, and may even provide opportunities for valuable feedback on your risk management practices.

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5 Be Proactive

Don't wait for an audit or inspection to initiate contact with regulators. Be proactive by reaching out regularly to discuss any changes in your risk profile or to clarify new regulations. This proactive approach demonstrates your commitment to compliance and can help you stay ahead of potential issues. Regular communication can also keep you informed about the regulator's current focus areas, which can be invaluable in prioritizing your own risk management initiatives.

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6 Learn from Feedback

Finally, view feedback from regulators and auditors as an opportunity to improve your risk management framework. Whether it's during formal audits or routine communications, take note of any recommendations or areas of concern they highlight. Use this information to refine your processes and address any gaps. Continuous improvement is essential in risk management, and insights from external experts can be instrumental in enhancing your organization's resilience.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Steve Tunstall

Board Chair & Director, MAS & HKIA Regulated Companies: Risk, Technology, Sustainability and Business Growth, open to Board, AC, and Risk Committee positions. Founder, investor and Tech Evangelist for Asia
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Quite frankly I would not engage directly with regulators as a risk manager, that’s why you have a compliance team. It’s their job along with the GC. Except of course in banks where the risk managers are compliance professionals pretending to be risk managers. And talking to auditors is always dangerous - whoever you are.

Like

Here's how you can effectively engage regulators and auditors as a risk manager.

1

2

3

4

5

6

7

1 Know the Rules

2 Prepare Thoroughly

3 Communicate Clearly

4 Foster Relationships

5 Be Proactive

6 Learn from Feedback

7 Here’s what else to consider

Risk Management

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Here's how you can effectively engage regulators and auditors as a risk manager.

1

2

3

4

5

6

7

1 Know the Rules

2 Prepare Thoroughly

3 Communicate Clearly

4 Foster Relationships

5 Be Proactive

6 Learn from Feedback

7 Here’s what else to consider

Risk Management

Rate this article

Thanks for your feedback

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