What are Compliance Key Risk Indicators (KRIs)?

2 min readJan 30, 2024

Compliance Key Risk Indicators (KRIs) are metrics used to provide an early signal of increasing risk exposures in various areas of an organization’s operations. Effective KRIs can help in proactive risk management by highlighting potential issues before they become significant problems. Here are some common categories and examples of compliance KRIs:

Regulatory Compliance:

Number of regulatory changes applicable to the organization in a given period.
Frequency and severity of regulatory fines or penalties.
Number of failed regulatory audits or inspections.

Internal Policy Adherence:

Instances of policy violations or exceptions.
Frequency of policy updates and percentage of employees who have acknowledged these updates.
Results from internal audits or compliance reviews.

Training and Awareness:

Percentage of employees who have completed mandatory compliance training.
Results of compliance knowledge tests or assessments.
Number of training sessions held versus planned.

Employee Conduct:

Number of internal reports or whistleblower complaints related to unethical behavior.
Frequency of conflicts of interest declarations.
Employee turnover rates, particularly in sensitive or high-risk positions.

Third-Party and Vendor Risks:

Number of compliance issues identified in third-party audits.
Percentage of vendors who have passed/failed compliance assessments.
Delays in third-party compliance certifications or renewals.

Data Protection and Privacy:

Number of data breaches or loss incidents.
Time taken to detect and respond to data breaches.
Number of data protection complaints or requests (like GDPR requests).

Financial Compliance:

Frequency and results of financial audits.
Instances of inaccurate financial reporting.
Variations in financial transactions that could indicate fraud or error.

Legal and Litigation Risks:

Number of ongoing legal cases.
Legal expenses as a percentage of revenue.
Frequency of legal consultations or advice sought.

Operational Compliance:

Frequency of operational shutdowns or interruptions due to compliance failures.
Number of incidents of non-compliance with health and safety regulations.
Compliance-related operational delays.

Information and Cybersecurity:

Number of cybersecurity incidents.
Time to patch critical security vulnerabilities.
Results of IT security audits.

Customer and Market Feedback:

Number of customer complaints related to compliance issues.
Changes in customer satisfaction scores related to compliance matters.
Market share changes due to compliance or ethical issues.

Final thoughts

It’s important to note that KRIs should be tailored to the specific risks and nature of the organization. They should be regularly reviewed and updated to remain relevant and effective in the evolving risk landscape. Moreover, KRIs should be integrated into the organization’s overall risk management framework and should be monitored continuously with clear reporting and escalation processes.

Disclaimer: The information provided herein is solely for informational purposes and represents my own personal views. It should not be construed as legal or regulatory advice. For advice specific to your circumstances, please consult a qualified professional. Additionally, the opinions expressed are my own and do not reflect the views of my employer.