Risk Management

1. CHAPTER-8

2. 1. Governance
2. Strategy
3. Risk Management
4. Nexus
5. Objectives of risk management,
6. corporate strategy and corporate
governance
7. Risk management, strategies and
governance in corporate crises
8. Risk Management Strategies
9. Risk management practices in state-
owned enterprises
10.Risk management practices in
unlisted companies
11.Strategic Risk Management and
governance
12.Corporate
13.Department
14.Borough
15.Project
16.Strategic Risk Management
17.Elements of corporate governance to
manage strategic risk
18.Culture
19.Leadership
20.Alignment
21.Systems
22.Structure
23.Challenges and Issues in
Implementing ERM
24.Conclusion
Outlines

3. Introduction
This chapter provides
 Coverage to risk management
 corporate strategy
 corporate governance
 Corporate governance has become an argumentative
 hot-button topic in both the modish
 financial media.
 link between various risk management strategies has been described in
this chapter and how it relates to corporate governance mechanism

4. Governance has been defined to refer to
structures and processes that are designed to
ensure accountability, transparency,
responsiveness, rule of law, stability, equity and
inclusiveness, empowerment, and broad-based
participation
Governance

5. Nexus
Risk management deals with chances of loss that arises as a
result of exposure. It includes actions and policies that
management apply for adverse outcomes and increase the
chances of positive outcomes, and is a tool for managing
several risk strategies.

6. Objectives of risk management
Essentially, the goal of risk management is to identify
potential problems before they occur and have a plan
for addressing them. Risk management looks at
internal and external risks that could negatively impact
an organization.

7. Corporate strategy and
Corporate governance
Corporate strategy plays a critical role in the proper
functioning of an organization as it provides the
blueprint that guides the corporate direction of an
organization while governance structure presents an
organization with a framework for the distribution of
responsibilities and resources to achieve organization

8. Risk management, strategies and
governance in corporate crises
Corporate governance standards should place
sufficient emphasis on ex ante identification of risks.
Attention should be paid to both financial and non-
financial risks, and risk management should
encompass both strategic and operational risks.
valuable, even if not necessarily transferable to the
non-financial sector.

9. Strategic Risk Management and
governance
Clearly, corporate governance is the basic framework
from which effective risk management takes shape.
Corporate governance elaborates the division of
responsibility within the organization for risk
management, and determines the means with which, at
each level., risk management will be implemented.
Following are the four ways, by which an organizations
manage their risk:
• Corporate
• Department
• Borough
• Project

10. Corporate
Risk that is generated at the corporate level have
a severe and most possibly shocking effect on
how we work. It is noticeable by the people and
it can generate huge media coverage because of
risk occurring event.

11. Department
Risk that happens at the departmental
level does not have any severe impact for
the organization as a whole but it is only
concerned for the related department.

12. Borough
Risk that happens at the borough level are the
one that have severe impact on the provision of
service in that region, however the influence of
such risk does not impact organization as a
whole unless other regions also were suffering
from similar risk event.

13. Project
Risk management in project follows the
similar principles and similar risk assessment
to value project risk. In many cases, it keep
on with the project and assigned to an elected
project team member.

14. Strategic Risk Management
Strategic risk management is the process of
identifying, quantifying, and mitigating any risk
that affects or is inherent in a company's
business strategy, strategic objectives, and
strategy execution.

15. Culture
Culture plays an important role in
maintenance of an attitude with arrogant. It
also encourage secrecy but often reluctance to
accept failure that have produced dreadful
consequences.

16. Leadership
In an organization the empowerment of any worker is mainly depends on
organizational capability to reveal a leadership style. It help in building a safe
atmosphere where teams feel relaxed and support participation. Boards should
also protect against bad leadership by implementing on seven mechanism.
These mechanisms are
• Expending values-based management
• Set an example
• Creating clear prospects of ethical behavior
• Providing feedback, and support concerning ethical behavior
• Identifying and rewarding performances that sustenance administrative
values
• Being responsive of individual variances among assistants and
• Creating leadership teaching and mentoring.

17. Risk management practices in
state-owned enterprises
Two types of organizations have raised in the last crisis, when
evaluating risk-seeking behavior these are as follows
 SOEs which is considered as state owned financial
organization
 SOEs which is considered as enterprises owned by sub
national level of government,
The most challenging examples of risk management
happened in banks and other institutions that are owned by
SOEs.

18. Risk management practices in
unlisted companies
The purpose of risk management in unlisted
companies is to certify that company is working
efficiently and information that it reveals is
reliable.

19. Challenges and Issues in
Implementing ERM
Jerry Micolism highlighted some of main
issues with respect to implementation of
enterprise risk management in his article
“Implementing Enterprise Risk
Management: Getting the fundamentals
Right”.

20. Conclusion
The core principle of risk management is not
eradicating risk but it is which risk to take and which
one to avoid and pass it to the investors. In this
chapter, the process of identification and monitoring
of risky has been discussed at length. The important
features of risk takers and risk avoiders have also
been presented. Finally, the effects of institutional
structure and culture on inspiring and fostering risk
taking is discussed.

21. Any Question?
Thanks