Institutional Graduation Path A Discussion Guide for Senior Management Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

Where in the process: step 3 and 4

Institutional Graduation Path By identifying institutional risk management gaps, MFIs can develop their Institutional Graduation Path—a strategic improvement pathway toward bringing their risk management practices in line with RMGM guidelines. Use this slide to lead them into discussion of their Institutional Graduation Path. Goal Tier level? Level of adherence?

Objective By the end of the workshop, you will have clarity on Where [INSERT NAME OF MFI] stands in relation to RIM’s RMGM guidelines on risk management [INSERT NAME OF MFI] draft Institutional Graduation Path Prioritized strategies and action plans for enhancing risk management

Agenda [Copy/paste in workshop agenda from Practical Tool 6.1] This is a sample.

Co-Facilitators Timekeeper Flipchart Notes (decisions, parking lot, action items) Photos

Ground Rules Turn off mobile devices Be on time Respect everyone’s thoughts and opinions Discussion of risk management level is not a reflection of your department’s performance Need Flipchart Discuss ground rules

Prioritization Criteria Urgency Strategic Plan Resources Needs Technical Assistance (TA) RIM Risk Management House What else? Brainstorm session – add/edit/delete as the the participants discuss. Too many criteria will not be helpful. Guide the room to choose top 3 criteria to apply as you run through all the risk management improvement areas. Write the criteria on a flip chart and place somewhere visible from anywhere in the room.

[INSERT NAME OF MFI] Strategic Objectives Complete this slide prior to the workshop by filling in the MFI’s Strategic Objectives. Ask the MFI to provide to you. Quick review your financial institution’s strategic objectives to align with the Institutional Graduation Path. Ideal to ask CEO to present this slide.

SWOT Analysis Strengths Weakness Opportunities Threats If the FI has conducted a SWOT Analysis as part of their strategic planning or business planning, insert the analysis into this slide. Review the External realities (Opportunities & Threats) and Internal capacity (Strengths & Weaknesses). The purpose is to get the audience to enter the mindset of thinking strategically for the institution when discussing risk management development. This is a quick review – don’t spend too much time on this.

RMGM Assessment Results and Prioritization Developing the Institutional Graduation Path Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

Current RMGM Assessment Results RISK AREA SCORE MAX SCORE COMPLIANCE Foundations 4.5 11.0 40.9% Floor: Strategic Risk Management 24.0 37.0 64.9% Pillar 1: Credit Risk Management 38.0 74.0 51.4% Pillar 2: Financial Risk Management 7.5 40.0 18.8% Pillar 3: Operational Risk Management 28.0 65.0 43.1% Roof: Financial and Social Goals 33.0 33.3% Total 113.0 260.0 43.5% Pull from RMGM Chart. Don’t spend too much time with the results, especially with the scores. 1) For details, offer the diagnostic tool and the final report

Current RMGM Assessment Results Pull from Diagnostic Chart

How should your risk management house look? Ask the audience the representation of each area; Reminder about Foundation drives the Floor that drives the Pillars and ultimately the Performance Results on the Roof. ;Reminder about the balance and interconnectedness. Refer to staff’s Self-Assessment – what this MFI house actually looks like based on the scoring results. For example, narrow foundation and floor with very thick Credit Risk with almost non-existent other pillars.

How your risk management house currently looks Draw the house based on RMGM scores using graphics provided within Practical Tool 5.1 – Risk Management House Component Graphics Discuss the unbalance Anything surprising? Anything that stands out?

Detailed Findings and Improvement Areas Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

Detailed Findings and Improvement Areas The Foundation Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

Governance & Strategy USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessments with assessors comments, review the unmet guidelines\ Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority Enter high priority guidelines onto this slide for everyone to see.

Risk Culture Culture – not quantifiable yet extremely important. Risk management is changing a way of doing everything, not an add on department to an institution. Use culturally appropriate example to give a good understanding of what risk culture looks like. Strong risk management system is founded in the organization’s culture of asking the necessary questions and transparency. USE FLIPCHARTS Present a summary findings for this component from Assessor’s perspective. Present the detailed findings from RMGM Assessments with Consultant Comments, review the unmet guidelines\ Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the FI makes a good case. Discuss its urgency, if its adherence aligns with Strategic Plan, Resources available, and if outside TA is necessary. Discuss the level of priority Enter high priority guidelines onto this slide for everyone to see.

Internal Controls & MIS Effectiveness and completeness of internal controls Timeliness and accuracy of MIS Information support to make decisions and notify, communicate performance and risks USE FLIPCHARTS Present a summary findings for this component from Assessor’s perspective. Present the detailed findings from RMGM Assessments with Consultant Comments, review the unmet guidelines\ Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the FI makes a good case. Discuss its urgency, if its adherence aligns with Strategic Plan, Resources available, and if outside TA is necessary. Discuss the level of priority Enter high priority guidelines onto this slide for everyone to see.

Detailed Findings and Improvement Areas The Floor – Strategic Risk Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

Governance Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Strategic Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Detailed Findings and Improvement Areas The Pillars Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

Pillar 1: Credit Risk Credit Transaction Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 1: Credit Risk Portfolio Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 2: Financial Risk Liquidity Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 2: Financial Risk Foreign Exchange Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 2: Financial Risk Interest Rate Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 2: Financial Risk Investment Portfolio Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 2: Financial Risk Capital Adequacy Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 3: Operational Risk People Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 3: Operational Risk Process Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 3: Operational Risk Systems Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 3: Operational Risk External Events Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Pillar 3: Operational Risk Legal & Compliance Risk USE FLIPCHARTS Present a summary findings for this component from assessor’s perspective. Present the detailed findings from RMGM Assessment with assessor’s comments, review the unmet guidelines. Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the MFI makes a good case. Discuss its urgency, if its adherence aligns with strategic plan, resources available, and if outside technical assistance is necessary. Discuss the level of priority. Enter high priority guidelines onto this slide for everyone to see.

Detailed Findings and Improvement Areas The Roof – Financial and Social Goals Where When Facilitated by Assessor Print out the Proposed Graduation Path for BoD to review

The Roof: Financial and Social Goals Not about “are you reaching your goals?” More about do you have ways to measure your goals are coherent, smart, adequate, achievable goals within your institution’s risk appetite? USE FLIPCHARTS Present a summary findings for this component from Assessor’s perspective. Present the detailed findings from RMGM Assessments with Consultant Comments, review the unmet guidelines\ Discuss the unmet guidelines and answer any questions. Be prepared to edit the findings, if the FI makes a good case. Discuss its urgency, if its adherence aligns with Strategic Plan, Resources available, and if outside TA is necessary. Discuss the level of priority Enter high priority guidelines onto this slide for everyone to see.

Review the Big Picture Priority by Risk Management House component? Does the Institutional Graduation Path strengthen your Risk Management House?

Group Work: 1 Hour Select a note taker Select a spokesperson Complete the Institutional Graduation Path in your group Discuss the following: Review priority decision Who is the lead? Who needs to approve such an improvement plan? For the improvement to complete within 12 months, write down start date and end date, time and $ budget Presentation by spokesperson Refer to Practical Tool 6.2: Institutional Graduation Path Workshop Template & Facilitator’s Guide

Group Work: In Your Risk Area Prioritize and Plan

Any Questions? Contact Information [ENTER ASSESSOR’S NAME] [ENTER ASSESSOR’S EMAIL] www.riminitiative.org info@riminitiative.org