Operational Risk Management Clause Samples

Operational Risk Management. Operational risk is the risk of loss (direct or indirect) resulting from inadequate or failed internal processes, people and systems or from external events. The Bank manages its operational risk through a management structure comprising members of senior management and operational risk officers from each business and support function, and operating through a set of operational risk policies, risk tool-kits, operational risk incident reporting and tracking system, and control self assessment and key risk indicator tools. Together with well established internal control systems, operational risk in most situations can be adequately identified, assessed, monitored and mitigated. To allow the operational risk framework to be clearly communicated to all levels within the Bank, awareness and training programs are conducted from time to time. To minimise the impact on the Bank’s business in the event of system failure or disasters, back-up sites and operational recovery policies and plans have been established and tested for all critical business and operations functions. Operational risk framework is also supported by periodic independent reviews of internal control systems by external and internal auditors. Reporting and assessment of the performance of operational risk management are monitored by Group Risk and reported to the Risk Management Committee.

Operational Risk Management. Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The Bank’s Management Committee, which comprises the Chief Executive, all division heads and deputy division heads, provides a key management control role in guiding the initiation and implementation of policies and procedures related to the operations and activities of the Bank, co-coordinating the work of the divisions, prioritising projects and tasks, resolving internal issues and enhancing operational control. Ongoing information technology security reviews, upgrades and audits help strengthen the core system and security reliability. To sustain a high degree of operational robustness and continuity for the critical businesses and processes of the Bank, measures to strengthen business continuity planning, readiness and effectiveness have been adopted. The Bank’s operational risk capabilities and systems have been reviewed against the proposed requirements of Basel II. Business units are required to monitor their operational risks using Bank and business level standards and indicators. Where appropriate, issues must be reported to business heads and the Head of Operations. The Bank purchases insurance where appropriate to address operational risk inherent to its business activities. The Bank’s Internal Audit Division is an independent, objective assurance and consulting unit which is designed to focus on enhancing and sustaining sound internal control in all business and operational units of the Bank. The Internal Audit Division reports functionally to the Audit Committee which is chaired by an independent non-executive Director. The Internal Audit Division conducts a wide variety of internal control activities such as compliance audits and operations and systems reviews to ensure the integrity, efficiency and effectiveness of the systems of control of the Bank. Corporate governance is concerned with how companies are managed and controlled, and in particular the roles and operations of the board of directors in sustaining sound business integrity and practices, and effective accountability. DSB has fully complied with the requirements set out in the guideline entitled “Corporate Governance of Locally Incorporated Authorized Institutions” issued by the HKMA.