Institutional Graduation Path A Discussion Guide for Board of Directors 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 RMGM Assessment Results RMGM Graduation Path proposed by your staff Review and Approve Graduation Path

Agenda Copy & paste in workshop agenda Left blank intentionally. The Assessor may decide to have a separate BoD workshop or combine with Sr. Mngt, depends on the situation and many variables. See Technical Guide.

RMGM Assessment Results 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. For details, offer the assessment tool and the final report. Explain the scores, your overall analysis of the scores.

Current RMGM Assessment Results Pull from Diagnostic Chart Another way to present the findings. Solicit reactions from the participants.

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

What will your risk management house look like one year from now? Draw the risk management house based on RMGM scores from the Graduation Path Proposal – If all the Next Steps were completed, what would their risk management house look like in a year from now?

Prioritization Criteria List the criteria that was used during the Graduation Path workshop with the Senior Managers. Ask the BoD if they agree with the criteria. If not, why not and discuss how to reconcile the differences. If reconciliation seems impossible, keep in mind that the BoD has the final say in the institution’s strategic direction and priorities.

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

Foundation Highlights from Findings Priority & Next 12 Months Present Highlights from the findings in this risk area Present the high priority chosen by the Sr. Managers Present the high priority that were also chosen to work on in the next 12 months. Discuss Board’s reaction, questions, changes, until a decision is met. A decision can be an approval or park for discussion at their committee or board meetings, as fits.

Floor – Strategic Risk Highlights from Findings Priority & Next 12 Months Present Highlights from the findings in this risk area Present the high priority chosen by the Sr. Managers Present the high priority that were also chosen to work on in the next 12 months. Discuss Board’s reaction, questions, changes, until a decision is met. A decision can be an approval or park for discussion at their committee or board meetings, as fits.

Pillar 1: Credit Risk Highlights from Findings Priority & Next 12 Months Present Highlights from the findings in this risk area Present the high priority chosen by the Sr. Managers Present the high priority that were also chosen to work on in the next 12 months. Discuss Board’s reaction, questions, changes, until a decision is met. A decision can be an approval or park for discussion at their committee or board meetings, as fits.

Pillar 2: Financial Risk Highlights from Findings Priority & Next 12 Months Present Highlights from the findings in this risk area Present the high priority chosen by the Sr. Managers Present the high priority that were also chosen to work on in the next 12 months. Discuss Board’s reaction, questions, changes, until a decision is met. A decision can be an approval or park for discussion at their committee or board meetings, as fits.

Pillar 3: Operational Risk Highlights from Findings Priority & Next 12 Months Divide discussion into subcategories: People Risk Process Risk Systems Risk External Events Risk Legal&Compliance Risk Present Highlights from the findings in this risk area Present the high priority chosen by the Sr. Managers Present the high priority that were also chosen to work on in the next 12 months. Discuss Board’s reaction, questions, changes, until a decision is met. A decision can be an approval or park for discussion at their committee or board meetings, as fits.

The Roof: Financial and Social Goals Highlights Priority & Next 12 Months 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? Present Highlights from the findings in this risk area Present the high priority chosen by the Sr. Managers Present the high priority that were also chosen to work on in the next 12 months. Discuss Board’s reaction, questions, changes, until a decision is met. A decision can be an approval or park for discussion at their committee or board meetings, as fits.

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