For financial institutions, the business is about taking risk. However, managing and rewarding the performance of the risk function is difficult because its performance cannot be readily observed.
In this report, we talk about the rewards for risk staff and three steps should be followed:
1. Allow for the use of management judgement in the performance assessment.
2. Retain the flexibility to move high-calibre staff between risk and the front office.
3. Ensure that payout structures support long term performance.
In conclusion, we believe assessing and rewarding risk function is critical and there are opportunities to improve.
If you wish to know more about our Finance & Risk Practice please click here.
