Risk managers and operations leaders spend countless hours preparing for governance meetings. Risk control, FINREP, CRO calls, executive are long; the presentations are immaculate; the data visualisations are carefully crafted. But when meetings are meant to be the organisation's most serious conversations about risk.
And yet, when it comes to what actually gets recorded, the approach in many firms is remarkably minimalistic.
The official record - the minutes, the pack annotations, the "approved" actions - often tell a story that is cleaner, shorter, and more sanitised than the discussion that actually took place. Difficult questions that took 30 minutes to work through get quietly discourage recording more than is strictly necessary, for fear that a full account could later be used against the firm in litigation or regulatory action.
At first glance, this seems prudent. Why create a paper trail that could be reconsidered? But there is a cost to this strategy - and it shows up when the stakes are at their highest.
Imagine this scenario.
Six months after a major risk decision - say, a change to a reserving methodology - regulators ask for evidence that the decision was made following proper oversight. You have the final minutes, of course. They say that the committee met, reviewed the paper, and approved the proposal. But they do not show the tolerances that were debated.
You're left reconstructing the rationale from memory, asking participants to write down what they recall (long after the fact), and hoping that no one who discusses this, and no formal record allows you to demonstrate one way or the other inspire confidence.
This is not a hypothetical risk. Regulators and auditors increasingly expect some transparency so decisions can be properly made. They need to see that the right people were in the room, that relevant data was reviewed, and that supervisory concerns were understood, or at least. They want to see one-line minute is not always enough to demonstrate that.
The challenge, of course, is finding the balance. Capturing a full transcript of every word spoken could only be unwieldy but could indeed increase legal exposure. What organisations need is a way to reliably capture the decision, the rationale behind it, and the key factors that were considered - without recording everything that was said.