Chapter 14 - Corporate Risk Assessment Responsibility for...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Corporate Risk Assessment Responsibility for Risk Profiling, Risk Strategy, Risk Policy and Risk Supervision - Risk can only be avoided by choosing to do nothing - CG means creating business value whilst managing risk - Companies that are recognized as having professional enterprise risk mgmt and transparent risk reporting are respected o Cost of capital is lower - Risk assessment need proactive forward looking orientation - Risk mgmt committee: o Wholly or mainly independent, non-executive directors (INEDs) o Distinct standing committee - Mgmt based risk mgmt group: o Might include CEO, CFO, profit-responsible division and responsible risk mgmt executive (s) o Needs to take a strategic view of corporate risk and avoid adopting a purely financial view o Report to CEO or CFO - The Chief Risk Officer (CRO) o Risk mgmt committee CRO is their secretary - Risk mgmt is undertaken at the business unit level ‘silo’ or ‘bucket’ approach, with each part of the organization standing on its own base, Responsibility for risk mgmt is then located in middle mgmt with managers insuring the business against the classical risks orientation: operational Levels and Types of Risk - Strategic risk – Exposure to threats from outside the organization - Mgmt level risks – Exposure to risks arising from the firm’s activities - Operational risks – Exposure to hazards within the enterprise - One approach to recognizing significant risk is to consider what circumstances or events could affect the key drivers of business value - An enterprise is more likely to fail disastrously from risks at mgmt or strategic levels Risk Analysis - Risk recognition - Risk assessment
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Chapter 14 - Corporate Risk Assessment Responsibility for...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online