It is important that your organisation builds the competence to drive effective remediation

In a world where errors and unforeseen complications are inevitable, having effective controls is crucial for your business. But when controls fail and companies' risk management is flawed, then a smooth remediation process is needed to ensure cleanup and recovery. This helps to minimise financial losses and restore confidence.

The risks are not decreasing, in an era of changing legislation and increased regulatory requirements, macroeconomic fluctuations and increased digitalisation, new challenges and vulnerabilities are being created. It is therefore important that your organisation builds the competence to drive effective remediation.

Remediation is the process of identifying and correcting problems or errors that have already occurred. In general, it involves a systematic approach to identifying and solving problems, but also to paying compensation to affected people.

Remediation can be used in many areas, data leaks, cyber security attacks, incorrect collection of e.g., taxes or fees, natural disasters, food safety, etc.

Effective remediation helps rebuild your customers' trust, prevents customer loss, and protects your company's reputation. At the same time, it shows a commitment to taking responsibility for errors and shortcomings. Lack of remediation can lead to problems escalating and becoming even harder and more expensive to solve. All organisations may need remediation, but on very different scales.

A breach of GDPR can, for example, mean a long-term need to handle remediation, whereas a separate systematic error in a system can potentially be identified and resolved quickly if the organisation has identified the error early on and mobilised a remediation plan.

The greatest challenge lies precisely in the mobilisation of the remediation programme. Managers frequently have their focus on KPIs and fail to take adequate responsibility for the problem. The result is often that an organisation starts debugging without knowing the full scope of the problem.

The five steps

Here are five steps to help you build the skills to drive effective remediation in your organisation:

First, you need to identify and assess risks. Conduct an exploratory pre-analysis of your organisation to identify risks of systematic errors and evaluate the effectiveness of your controls. A risk assessment should help identify the root cause and estimate the scope for remediation.

Secondly, it is important that you evaluate the need for remediation. Use the insights from the risk assessment to generate a remediation profile. Determine your organisation's risk appetite and agree on a strategic direction. Make a detailed plan of how you will deal with and correct identified problems.

Thirdly, you need to establish the right governance and organisation that matches the newly identified need. Prepare a plan and mobilise the necessary competencies in the project to execute the plan. Make sure all relevant stakeholders are informed and understand the plan so that there is the right support and commitment to the project from start to finish. Monitor and adjust the plan continuously to ensure maximum efficiency.

Fourth, it is important that you begin the task of remediation by establishing a strong communication strategy to ensure a dialogue with regulatory authorities and core stakeholders.

These actions create the necessary peace of mind to analyse the adverse events and design the right solution that matches the challenge your company is facing, and which covers a wide range in terms of culture, processes, controls, governance, payment of any compensation, etc. With this approach, we can move away from firefighting and towards controlled transformation, where the organisation can connect to its desired future operating model.

Finally, monitor and audit, continuously evaluate the effectiveness of your remediation strategy and make necessary adjustments to ensure it remains effective and relevant.

Remediation as an opportunity for development

We often find that steps one to three are skipped or performed inadequately. Therefore, further errors arise along the way, leading to new, expensive, and time-consuming challenges.

Often, decisions are not taken about what the level of new resources are needed to identify the errors that need to be corrected. This often results in efforts being launched later than they need to because of an apparent misunderstanding about the need for remediation.

Although few organisations want to imagine themselves in a situation where a clean-up is needed, remediation projects can be a crucial turning point. This is because the whole process also provides an opportunity to look in the mirror and consider the cultural, structural, operational and managerial characteristics that lie behind the organisation's current situation. Used correctly, clean-up projects can therefore provide an opening to ensure responsible risk management and process control in the future.

Read the full Danish article in Børsen here.