Conduct and culture Programme

Workshop 3: Conduct and culture


Conduct Risk: Framework, best practices and innovation

Day 1 - 11 September


Coffee and Registration


Understand conduct risk - the fundamentals

  • People risk and conduct risk
  • The root causes of conduct risks
  • Who is affected by conduct risk?
  • What are the common failures?
  • Case studies: what causes the LIBOR rate fixing scandal, the London whale trading issue, the misselling of complex products and payment protection insurance to retail customers and the failure to safeguard client assets?
  • Misconduct on the trading floor – what have we learnt from the incidences?

Morning coffee break 


Behavioural finance and practical application

  • Why do People make bad decisions?
  • Why is Behavioral Finance important – a quiet revolution
  • Global perspectives and principles of behavioural finance
  • Decision traps: how and why people make the wrong decisions?
  • Strategies in avoiding costly mistakes and making better choices



Define scope of conduct risk and risk appetite

  • Define misconduct for your business
  • Define the roles and responsibilities of conduct risk governance
  • Anticipate the impact of conduct risk to your business model and strategy
  • Conduct risk
    • Behaviour and culture
    • Adopting the top down and bottom up approach
    • How to manage conflicts of interest and undertake supervision
    • Aligning incentive and reward programmes
    • Communication and training
  • Codes of Conduct – how useful are they?
  • What does a risk appetite for conduct risk look like?

Afternoon coffee break 


Identifying conduct risk in product lifecycles

  • What is product governance? An evolving discipline.
  • Who is the target market?
    • Understanding customer needs and their financial literacy 
    • Suitability and appropriateness of products or services 
  • Product design
    • Fairness and robustness of the product design and distribution process
    • Product disclosures
    • Stress testing
  • Product monitoring 
    • Accountability at each stage of the product lifecycle
    • Importance of complaints handling and remediation
  • Evaluating the governance processes around new products – how are they created, considered, signed-off, reviewed and retired

End of day 1

Day 2 - 12 September




Regulatory perspective on conduct risk

  • Why is managing 'conduct risk' so important?
  • Identifying conduct risk
  • Managing conduct risk
  • Regulatory expectations going forward

Considerations on Risk Appetite Framework and strategic planning

  • Linking risk appetite to strategic planning
  • Conduct risk considerations in risk appetite and business planning
  • Leveraging a risk appetite framework to reinforce risk culture
  • Risk-reward and optimising within risk appetite: why conduct risk is different

Morning coffee break 


Approaches to building a positive risk culture

  • Views on risk culture from across the industry
  • The importance of risk culture
  • What factors affect risk culture?
  • How can we influence and build a positive risk culture?



Perspective on the management of conduct risk

  • Understand the environment
  • Identifying conduct risk
  • Measuring conduct risk
    • Data collection and usefulness of data
    • Statistical approaches, scenario analysis, scorecards
    • Cluster analysis, principal component analysis, big data
  • Managing and monitoring conduct risk
    • Establishing a conduct risk strategy/ framework
    • Embedding in the business
  • Other views

Enhancing due diligence capability for reputational risk protection

  • Reputational risk environment in Australia
  • Due diligence as a mechanism for managing reputational risk
  • How due diligence plays into the financial crime (AML/ CTF, Sanctions, ABC) regulatory framework in Australia 
  • Changes on the horizon for the AML regulatory framework in Australia (AML/ CTF Rules changes / FATF Mutual Evaluation Report)

Afternoon coffee break 


Monitor, report, and review effectiveness

  • Define “success” of your conduct risk governance programme
  • Tools in monitoring conduct risk
    • Measuring the degree of ownership and organisation
    • Is the infrastructure adequate in supporting sustainable conduct risk management?
    • Flags and warning indicators
  • Reporting conduct risk
    • Governance, committee alignment and decision making
    • Assessing data completeness, accuracy and integrity
    • Dashboards, reports and aggregation
    • Develop communication mechanisms to management and the Board
  • Implementation and success factors
    • Conduct outcomes and assessment
    • Stakeholder relationship and industry collaboration

End of training course