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Conduct Risk Suite

The eight courses in the Conduct Risk Suite familiarize employees with the various areas of a firm’s culture and operations that present a conduct risk — the risk that customers and clients will suffer detriment as a result of the firm’s inappropriate business culture or inappropriate judgment in the execution of its business activities — and identify ways to mitigate this risk. Combatting conduct risk requires encouraging ethical behavior from all individuals associated with the firm and at all stages of the firm’s business operations, including the following areas covered in the Conduct Risk Suite: customer outcomes, conflicts of interest, culture and tone from the top, recordkeeping, hiring and onboarding, whistleblowing and personal liability concerns.

Geography Covered: Global | Duration: 30 minutes

Summary

In the wake of the financial crisis, regulators have targeted the behavioral aspects of firms and their business activities. The crisis revealed that a “check-the-box” compliance mind-set is not sufficient. In addition to following the rules, firms must also improve the intangible factors that affect risk in order to prevent future problems. To put it another way, firm culture and actions need to reflect a “should we” attitude rather than simply checking whether business decisions satisfy the “can we” question in order to minimize conduct risk.

Conduct risk is of growing concern to regulators and firms around the world; for example, the UK’s Financial Conduct Authority (FCA) has placed heavy emphasis on the need for firms to address conduct risk and offered guidance on how to do so. Despite its importance, conduct risk is hard to define, and there is no single definition that works for every firm. Essentially, conduct risk is the risk that a firm’s inappropriate business culture or inappropriate judgment in the execution of its business activities will cause detriment to its customers and clients.

Firms need to assess their vulnerability to conduct risk and proactively identify ways to respond to ethical dilemmas. By doing so, firms may prevent or mitigate the negative consequences of conduct risk failures, which include financial, legal and reputational damage to the firm; poor outcomes for customers and clients; and harm to the financial system as a whole. The Conduct Risk Suite of courses helps employees understand their personal responsibility to follow the firm’s policies, act ethically and make appropriate choices when carrying out the firm’s business activities.

    • Conduct Risk Suite: An Overview (Global)
    • The overview is the first course in the Conduct Risk series. It provides an introduction to mitigating behavior-based risk, or 'conduct risk', as a way to benefit customers and clients.
    • Conduct Risk Suite: Conflicts of Interest
    • In the wake of the financial crisis, regulators have targeted the behavioral aspects of firms and their business activities. The crisis revealed that a 'check-the-box' compliance mind-set is not sufficient. In addition to following the rules, firms must also improve the intangible factors that affect risk in order to prevent future problems. To put it another way, firm culture and actions need to reflect a 'should we' attitude rather than simply checking whether business decisions satisfy the 'can we' question in order to minimize conduct risk.
    • Conduct Risk Suite: Culture and Tone from the Top
    • This course teaches senior managers and board members the importance of setting the tone from the top when it comes to developing a good firm culture, including discussions of regulatory requirements, conduct risk, complaints handling and sales incentives.
    • Conduct Risk Suite: Good Customer Outcomes (Global)
    • This is the second course in the Conduct Risk series. It discusses the need to instill customer-centered values in firm culture and to evaluate whether a firm’s values and actions result in good customer outcomes.
    • Conduct Risk Suite: Recordkeeping
    • This is the fifth course in the conduct risk suite, which covers hot to understand the need to evidence the firm's conduct risk efforts and culture 'in action,' explain the importance of making and maintaining accurate records, and identify internal and external uses for these records.
    • Conduct Risk Suite: Hiring and Onboarding Practices
    • In the wake of the financial crisis, regulators have targeted the behavioral aspects of firms and their business activities. The crisis revealed that a “check-the-box” compliance mind-set is not sufficient. In addition to following the rules, firms must also improve the intangible factors that affect risk in order to prevent future problems. To put it another way, firm culture and actions need to reflect a “should we” attitude rather than simply checking whether business decisions satisfy the “can we” question in order to minimize conduct risk.
    • Conduct Risk Suite: Whistleblowing
    • Emphasises that firm culture should support “speaking up” as a way to minimize conduct risk, elements of an effective whistleblowing programme, and employees’ obligation to report potential unethical behavior; cites whistleblower protection laws: Dodd-Frank Wall-Street Reform and Consumer Protection Act (US), Corporations Act 2001 (Australia), Companies Act Section 208 and Prevention of Corruption Act Section 36 (Singapore)
    • Conduct Risk Suite: Avoiding Personal Liability
    • This is the eighth course in the Conduct Risk series. It discusses regulatory expectations of Board members and senior individuals, the potential personal liability they may face in connection with conduct risk failures and ways to mitigate this risk. The course is appropriate for individuals on the Board of Directors and Senior Managers.
    • Conduct Risk in Insurance: An Overview
    • This course provides an overview of conduct risk within the insurance sector. The course includes a review of the organizational and individual responsibilities in relation to managing conduct risk to the benefit of insurance firms themselves, their employees and their customers.
    • Conduct Risk in Insurance: Conflicts of Interest
    • Learners may be familiar with laws, regulations and best practices, but this course provides an overview of conduct risk within the insurance sector with a focus on the types of conflicts of interest that can arise within an insurance firm. It is intended to train employees of insurance firms to recognize and avoid conflicts of interest, particularly with regard to personal, financial and family interests, dealing with customers and suppliers, and handling offers and acceptance of gifts and entertainment.
    • Conduct Risk in Insurance: Avoiding Personal Liability
    • This is the third course in the Conduct Risk series for insurance firms. It discusses regulatory expectations of Board Members and Senior Managers, the potential personal liability they may face in connection with conduct risk failures and ways to mitigate this risk. The course is appropriate for individuals on the Board of Directors and Senior Managers of insurance firms.
  • Content for the Thomson Reuters MicroLearning Suite is powered by world-leading regulatory intelligence, which tracks over 900 regulators and exchanges globally.

    Intended as a supplemental solution to our 800+ customizable compliance training course library, this learning suite changes the approach to online Conduct Risk Suite compliance training, from a ‘once-a-year’ event to a steady flow of interesting and informative trainings that reinforce both the ‘tone from the top’ and an organization’s core values.

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