What does a risk-based approach to ethics and compliance entail?

A risk-based approach to ethics and compliance entails prioritizing resources and efforts based on the level of risk associated with specific areas of operation. This methodology enables organizations to effectively allocate their resources to the areas that pose the highest potential for compliance violations or ethical breaches. By assessing the risks linked to different functions or activities, the organization can design targeted training, policies, and monitoring processes that address specific vulnerabilities.

This approach recognizes that not all parts of an organization present the same level of risk and that a uniform compliance strategy may not effectively mitigate issues in high-risk areas. Instead, it allows organizations to be more strategic and responsive in their compliance efforts, ensuring that they are addressing the most significant threats to their ethical framework and regulatory obligations.