Risk Reporting denotes the internal processes of an organization that collect, process and collate diverse information from internal and external sources with the objective of generating condensed overviews of the Risk Profile of the organization and thereby support further Risk Management activities.
Best Practices in Risk Reporting
Regulated institutions should follow the recommended best practices as articulated by the BIS
Risk management reports should accurately and precisely convey aggregated risk data and reflect risk in an exact manner. Reports should be reconciled and validated.
Risk management reports should cover all material risk areas within the organisation. The depth and scope of these reports should be consistent with the size and complexity of the bank’s operations and risk profile, as well as the requirements of the recipients.
Risk management reports should communicate information in a clear and concise manner. Reports should be easy to understand yet comprehensive enough to facilitate informed decision-making. Reports should include meaningful information tailored to the needs of the recipients
The board and senior management (or other recipients as appropriate) should set the frequency of risk management report production and distribution. Frequency requirements should reflect the needs of the recipients, the nature of the risk reported, and the speed, at which the risk can change, as well as the importance of reports in contributing to sound risk management and effective and efficient decision-making across the bank. The frequency of reports should be increased during times of stress/crisis.
Risk management reports should be distributed to the relevant parties while ensuring confidentiality is maintained
- BIS, Principles for effective risk data aggregation and risk reporting, 2013