Proactively managing conduct risk using the Integrity Risk Index
Managing conduct risk (workplace misconduct) is an essential element of good governance and a strategic priority for all organisations today. The current economic, regulatory, social climate, coupled with increasing stakeholder expectations has pushed conduct risk compliance to the forefront of corporate priorities.
Although conduct risk is often considered as a non-financial risk, the financial cost of a workplace misconduct event can be very significant, including losses from fraud, fines, and damage to brand and reputation.
Therefore, boards and senior executives are being called upon to respond to increasing pressure and scrutiny from stakeholders to provide tangible evidence that they are effectively managing conduct risk compliance.
Every organisation, regardless of its size, industry or maturity is exposed to conduct risks such as fraud, corruption, conflicts of interest and other workplace misconduct events. Proactively managing conduct risk is the only way for an organisation to ensure that it is protecting its people, reputation, and bottom line.
How to manage conduct risk – best practice
Many business initiatives to manage conduct risk are manual, ad hoc, and not centralised. The critical elements such as policy management and attestation, managing workplace certifications and managing workplace declarations and incidents are difficult to monitor collectively to identify key areas requiring immediate attention.
The multiple elements and detailed employee engagement data also make it difficult to assess the overall effectiveness of any conduct risk management initiatives.
Corethix addresses these issues by providing a centralised software platform that incorporates all the key elements required to manage conduct risk and engages with all employees and contractors for their key employment, risk and compliance obligations.
Corethix uses best practices for policy management and attestation, workplace certification compliance, and management of declarations and incidents, as well as managing employee and contactor engagement. Administrators are provided with real-time dashboards displaying a holistic view of how conduct risk is being managed across the business. The dashboards highlight key data to allow administrators to quickly identify key reporting trends, proactively manage non-compliance, as well as provide a detailed audit trail for analysis and incident investigation.
Integrity Risk Index (IRI)
Corethix also includes a unique feature called the Integrity Risk Index (IRI) which has been designed to provide a high level overview of the performance of an organisation’s conduct risk program. It does this by calculating a weekly Integrity Risk Index (IRI) score based on employee and contractor engagement with the platform. The IRI algorithm is based on for the integrity categories that have configured, and the modules that have been associated with each integrity category.
The Integrity Risk Index (IRI) is for businesses to simply, and accurately, know the effectiveness of their conduct risk management initiatives.
The Integrity Risk Index (IRI) is configured within Corethix by each organisation based on their industry type and their focus on specific workplace compliance requirements.
Configuring integrity categories
There are 5 key integrity categories that are recommended by Corethix that would apply to most organisations:
- Fraud, theft and misappropriation
- Conflicts of interest,
- Workplace health and safety,
- Unethical conduct or inappropriate behaviour,
- Gifts and entertainment.
In addition to the 5 recommended categories, certain organisations may require additional categories and can select from an incident category library, or if required create their own
Configure the Corethix modules
Each of the configured integrity categories are associated with the Corethix modules that will be used to support each of the categories.
The Integrity Risk Index (IRI) dashboard
The Integrity Risk Index (IRI) dashboard provides an IRI score trend graph and a prioritised list of suggested improvements plus a data table highlighting any issues relating to each of the configured integrity categories and associated modules.
- The IRI score trend graph is updated weekly and provides a high level assessment of the current conduct risk program.
- The IRI dashboard also provides prioritised suggestions for improving the Integrity Risk Index (IRI) score by using diagnostic analysis algorithms built into the Corethix platform software.
The data table identifies any issues that need to be investigated and links identified issues to the appropriate module dashboard for further analysis.
In simple terms, the Integrity risk Index (IRI) dashboard provides a single measure and trend of the performance of an organisation’s conduct risk program with detailed suggestions for improvement to proactively manage conduct risk.
If you would like to know more about Corethix and the Integrity Risk Index (IRI) then please contact us.