Sketch an organogram of Enterprise Risk Management (ERM) for the banking sector in Bangladesh. Expain your design.

 Organogram of Enterprise Risk Management (ERM) in a Bangladeshi Bank

                                Board of Directors  
                                      |  
                    -----------------------------------------  
                    |                                       |  
         Risk Management Committee (RMC)           Audit Committee  
                    |                                       |  
            Chief Risk Officer (CRO)                Internal Audit Department  
                    |  
            Risk Management Department (RMD)  
                    |  
    --------------------------------  
    |              |               |               |  
Credit Risk   Market Risk   Operational Risk   Liquidity Risk   Compliance Risk  
Division       Division         Division           Division         Division  

**Other Supporting Units:**  
- IT Department (Cybersecurity Risks)  
- Finance Department (Financial Reporting Risks)  
- HR Department (Employee-related Risks)  
- Branches/Business Units (Frontline Risk Identification)  

Explanation of the Design:

1. Board of Directors (Top-Level):

   • Sets the bank’s risk appetite and oversees the ERM framework.

   • Approve policies and ensure alignment with Bangladesh Bank’s regulations.

2. Risk Management Committee (RMC):

   • Sub-committee of the Board.

   • Supervises ERM implementation and reviews risk reports.

   • Headed by the Chief Risk Officer (CRO), who leads the Risk Management Department (RMD).

3. Risk Management Department (RMD):

   • Core unit for executing ERM. Divided into specialized divisions:

     • Credit Risk Division: Manages loan defaults and borrower risks.

     • Market Risk Division: Addresses risks from interest rates, forex, and investments.

     • Operational Risk Division: Tackles fraud, IT failures, and process gaps.

     • Liquidity Risk Division: Ensures cash flow stability.

     • Compliance Risk Division: Ensures adherence to Bangladesh Bank’s guidelines (e.g., AML, Basel III).

4. Audit Committee and Internal Audit Department:

   • Independent oversight: Audits risk controls and reports directly to the Board.

   • Ensures transparency and accountability (e.g., checks if RMD follows protocols).

5. Supporting Units (IT, Finance, HR):

   • Collaborate with RMD to manage department-specific risks.

   • Example: The IT Department handles cybersecurity, a subset of operational risk.

6. Branches/Business Units:

   • First line of defense: Frontline staff (e.g., loan officers, tellers) identify and report risks daily.

Why This Structure Works:

• Compliance: Aligns with Bangladesh Bank’s Core Risk Management Guidelines, ensuring dedicated risk units and regular reporting.

• Clarity: Separates roles (e.g., RMD manages risks, Internal Audit verifies controls).

• Efficiency: Specialized divisions (e.g., Credit Risk) enable focused risk mitigation.

This organogram ensures a systematic, top-down approach to risk management while fostering collaboration across departments, which is critical for stability in Bangladesh’s banking sector.