Risk Governance for An Investment Adviser



The senior team of a rapidly growing Global diversified investment manager was concerned about the effectiveness of the company’s risk Assessment Process. 

Senior executives found that various departments and business lines had developed inconsistent methods for defining risk. Risk planning had become separated from and not informed by business planning, and was done by different sets of people.  

Overtime, risk, budgeting, and business goals had become uncorrelated. Without a common understanding, there was no common agreement on how to discuss the firm's risk outlook, much less to achieve consensus on the firm's mitigation priorities. 

Also concerning, Board level presentations had become inconsistent, leading to misappropriation of resources, and misplaced expectations.  


ReGroup worked with the firm's leadership to introduce risk governance concepts and propose a framework for integrating the risk assessment process into the firm's strategic planning.  We worked with the firm to identify key sources of data, and match risk management priorities to the firm's investment strategies. 

We also created a set of key questions designed to guide the discussion to a consensus on what types of risk - reputation, regulatory, portfolio construction, technology, operations, data, human resources, vendors, , financial - would be areas of focus. 

We worked with departments and lines of business to develop the following a coordinated risk management framework, including: 

  1. A common lexicon for risk and a common approach for identifying and prioritizing risk across the organization;
  2. A more consistent capture, measurement, and reporting of risk data and mitigation status; 
  3.  A governance structure for enterprise risk management tasked with filtering risks that needed specific attention;
  4. A reporting dashboard used by each corporate function and operations group tasked with risk management; and
  5. A clearer assignment of responsibilities and deeper accountability across the organization for risk management as part of everyone's job. 


The understanding of risk throughout the organization, and ability to build consensus was greatly improved. Risk assessment was integrated into strategic planning and resource allocation, and the standardized dashboard facilitates discussion and remediation while reducing redundant and contrary efforts.

As a result, risk issues are identified, raised, and vetted in an efficient and effective manner, thereby increasing transparency into risk and mitigation and lowering the firm’s overall risk profile. The processes and tools formed a foundation and framework designed to evolve as the firm's understanding and needs changed. 


In order to do risk management well, you need to understand the business. ReGroup understands the business. ReGroup helped us understand the depth we needed to go to make sure the right framework was in place – that was our safety net.
— Jayne E., Senior Portfolio Manager