What is the primary role of the first line of defense in risk management?

The primary role of the first line of defense in risk management is to manage day-to-day risk controls. This line of defense consists of the operational staff and management who are responsible for identifying, assessing, and mitigating risks within their daily operations. They implement the controls necessary to manage risks effectively and ensure that the policies and procedures in place are followed.

The first line of defense is crucial because it is involved in the actual execution of risk management practices. This includes actively monitoring operations and taking immediate action to address potential issues as they arise, thereby helping to prevent risks from escalating. By managing these risks at the ground level, they contribute to the overall resilience and stability of the organization.

In contrast, providing independent assurance refers to the role of the second line of defense, which typically involves functions such as compliance and risk management frameworks that oversee and guide the first line. Monitoring economic conditions and assessing legal documentation fall more under analytical or support functions that help inform risk management strategies but do not directly involve the operational management of day-to-day risks.