Compliance Risk

The risk of legal or regulatory sanctions, material financial loss, or reputational damage that an organization may suffer as a result of failing to comply with laws, regulations, internal policies, or prescribed practices. Within RBPM, compliance risk is typically identified as a specific risk category requiring dedicated controls and monitoring. Effective management of compliance risk involves identifying applicable requirements, assessing potential impacts of non-compliance, implementing appropriate controls, monitoring compliance status, and reporting to governance bodies.