Operational Risk Management Framework <Insert Tagline> <Insert Date>

Losses can be defined as financial or non-financial Operational Risk In short, Operational Risk can be summarized as risk of loss due to failed Process, People, Systems, or Legal Losses can be defined as financial or non-financial $$$, losses (fines, penalties, lawsuits and interest payments) Loss of market share and long-term revenue Eroded reputation, share price, brand value and image Customer dissatisfaction Lost confidence (Investor, Auditor, Internal Management) Lost opportunity Lost sales and missed trade opportunities Inability to grow/scale-up (resources not focused on high-value opportunities) Failed Processes are … Ineffective: Have inadequate internal controls to prevent or detect loss Do not optimize business performance Do not optimize Team / Personnel performance and/or Inefficient: Consume more or less resources than necessary

Key Source Of Operational Risk: Process Processes are a sequence of interdependent and linked procedures which, at every stage, consume one or more resources (employee time, energy, machines, money) to convert inputs (data, material, parts, etc.) into outputs; these outputs then serve as inputs for the next stage until a known goal or end result is reached PROCEDURES Interdependent and linked INPUTS OUTPUTS NEXT STAGE Data Material Parts Employee Time Energy Machines Money Invoices RESOURCES GOAL Desired End Result If goals are met, this is an effective process If goals are met with optimal resources, this is an efficient process

Project Approach 1. Identification and Measurement of Critical Processes 2. Conduct Operational Risk Assessments for Critical Processes 3. Identify and Implement Process Improvements 4. Monitoring and Reporting Identify all major processes within the organization Host stakeholder engagement sessions Rank major processes based on operational risk profile Develop critical process quadrant and consolidate results Assess business process Determine if current processes, internal controls, and people mitigate Operational Risk If not, quantify severity of operational risk Determine if resource allocation is aligned with Operational Risk profile Reallocate resource distribution where required Develop and implement process improvements and internal controls as required Develop metrics for processes Streamline, benchmark, and automate Document and report learnings Measure performance against metrics