...related to the firm value. Therefore reputation risk management becomes extremely important for every corporation, if you don’t do it well, it may damage your firm value. What is reputation risk? Many researches show that reputation is the perception from stakeholders that has positive relationship to the firm value. Reputation risk is the risk that some incidents cause negative impact and damaging the firms’ brand value. It can due to the problems of the company products, rumors spread out, or publicized problem. This loss of the companies can be immediately financial loss, losing further business, decreasing of client base or losing goodwill. What is special about reputation risk is it interrelated to other risks and if it is not properly managed, it may turn into a crisis that danger the existence of the firm. A lot of business failures were caused by poorly manages of reputation risk. How to identify and assess reputation risk Many risks can be quantifying the exposure, but it is not the case for reputation risk, as it is related to some intangible assets and value of the firm, it is difficult to quantify and therefore some subjective method should be use to identify and assess reputation risk. Surveys of stakeholders, comparison with peers, media analysis and focus group meetings all are useful methods to assess reputation risk. Once you identified and assessed some reputation risk issues, you can located it on the risk map according to the frequency and the severity...
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...By analyzing financial statements of ECL, a risk analyst would draw following conclusions i.e.: Risk: In year 2010, company is exposed to liquidity risk. Balance sheet structure of ECL tells us that company has illiquid assets which won’t be able to generate immediate cash funds. Solution: Liquidity condition can be improved by appreciating “cash sales” and discouraging “credit sales”. Risk: Doubled finance cost, and high leverage are resulting negative cash flow; causing ECL to end up in danger zone with potential problems of liquidity and shortage of cash when required. Solution: Engro should emphasize more on equity financing, and lower debt financing in its capital structure. Long term debt should be replaced with equity shares. A wise strategy would be to issue convertible bonds, which would raise debt as required by organization; and later should be converted in shares. Risk: ECL is stuck with its inventory and has been unable to process it efficiently. Inventories represent investment with zero rate of return. If current condition prevails, then it will exert pressure on management to force prices down in order to lower inventory levels. This condition falls in operating risk category. If these conditions are profoundly explored; one can infer that inefficient production processes, lack of demand, or maybe inferior quality production. These all factors will sum up to be the risk of survival for ECL. Solution: By undergoing extensive...
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...CRM Assignment | Risk Profile & Risk Map | | | | | | Corporate Risk Management Assignment Risk Profile Significance | Likelihood of Occurrence | Risk Type | Risk Definition | Risk Description | 10 | 5 | Operational Risk | Aviation fuel price risk | ATF cost represents the largest category in airlines operating expenses and place the airline stability at long term risks. The prices of ATF have risen significantly in one & half year and constitute nearly 40% of ticket prices. | 9 | 5 | Market Risk | Hedging risk | Current high prices and the volatility in the prices of the fuel is making hedging strategy very difficult to implement | 9 | 5 | Personnel risk | Operational risk | Airline engineers strike recently and competitive offerings of the competitors is placing a strategy risk in front of the top management as the increase in the personnel cost can further increase the pressure on the operating margins of the airline. | 9 | 5 | Market Risk | Competition risk. | Airline industry is highly competitive in nature and with air travel becoming a commodity business, being competitive on price is key for the survival of any airline. | 8 | 5 | Exchange rate risk | Market risk | Airline has its payables in many currencies and with the volatility in the exchange rates airline is exposed to exchange rate risk | 7 | 4 | Economic risk | Market risk | Ongoing recession In US has cut deeply into profits of the airline and has raise questions over...
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...Case 2–2 Sabor Inc. In mid-April, Ray Soles, vice president of supply chain management at Sabor Inc., had become increasingly concerned about the potential shortage of supply of marconil, a new high-tech raw material for air filtration. Sabor Inc.’s three suppliers, during the last two weeks, had ad- vised Ray Soles to sign long-term contracts and he was trying to assess the advisability of such commitments. SABOR INC. Sabor Inc. of Cleveland, Ohio, produced high-quality consumer and industrial air-conditioning and heating units. An extensive network of independent and company-owned installation and sales centers serviced customers throughout the North American market. Total company sales last year totaled $800 million. AIR FILTRATION AND MARCONIL Sabor Inc. for decades had sold air humidification and air filtration units along with its prime units in air heating and cooling. Until three years ago, air filtration had accounted for about 7 percent of total corporate sales and had been sold primarily as add-ons to a new air cooling/ heating system. However, with the advent of marconil, air filtration had started to increase significantly as a percentage of total sales. Marconil, a new high-tech product developed as part of the U.S. space effort, had a range of unique properties of high interest to a variety of industries. In the case of air filtration, when processed by a Sabor Inc. developed and patented process, marconil could be transformed into a thin, very light...
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...safeguards – Physical safeguards – Technical safeguards What is HIPAA? • HIPAA: Health Insurance Portability and Accountability Act • It was passed by Congress in 1996 • broadly applicable to the health care industry • intended to address security for both electronic and physical patient records • standardizing electronic exchange of administrative & financial data in health care system • It includes requirements for: • Transfer and continuation of health insurance coverage • Reducing healthcare fraud and waste – The protection and confidential handling of protected health information (PHI) What is a breach? – A breach is an impermissible use or disclosure that compromises the security or privacy of PHI and poses a significant risk of financial, reputational, or other harm to the affected individual. • Breach notification is necessary in all situations except those in which the covered entity or business associate demonstrates that there is a low probability that the PHI has been compromised What is the Administrative Safeguards? [ • Administrative actions, and policies and procedures, to manage the...
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...have produced his property. It is imperative then that MLROs fully appreciate the vulnerabilities of their Bank’s particular products and services in order to be able to implement systems to prevent exploitation, and be able to properly evaluate unusual and potentially suspicious activity. The core characteristics and vulnerability of the products and services previously mentioned, from the perspective of anti-money laundering are as follows: Bank Accounts: Bank accounts are the entry point into the financial system. Once this is achieved the launderer has access to a wider network of vehicles with which to carry out his objectives. These accounts and services become highly vulnerable in facilitating money laundering. Particularly at risk would be dormant accounts once they are reactivated. Wire Transfers: Wire transfers are the electronic transferring of funds from one entity to another across a network administered by banks around the world. Because of the quick and...
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...Numerous standards and guidelines regarding this theme have been issued to create the motif that compliance should be a part of “business as usual” in which the standards of compliance are adopted as full time changes within the business environment. The PCI Security Standards Council clarifies this point stating, “if a risk assessment process is not already established, organizations will need to define and document their risk assessment methodology, identify individuals who will need to be involved, assign roles and responsibilities, and allocate resources” (PCI Security Standards Council, LLC, 2012). Through this process of continuous monitoring, organizations in contact with cardholder data will better develop a framework of continuous security, moving them closer to the true intent of the standards of PCI compliance (Valladares,...
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...What is penetration testing? Penetration testing is a way of trying to exploit the weaknesses of an organizations security defenses. Penetration testing may come in many forms and test different types liabilities. A few years ago people debated as to whether or not penetration testing was even needed. Now most people realize it is absolutely necessary. Although most people, when thinking of security breaches, think of network security in relation to hackers, there are many other security areas that must be tested. Some of these areas are physical security, telecommunications security, and environmental security. Other areas that may be tested are operating systems and applications, and social engineering. All of these areas are vital to the security of an organization. A breach in any of these systems may cause great detriment to the organization financially and a degradation of customer trust. Application and username/password weaknesses may be tested by using automated tools. These tools may also be used to find harmful software (virus, malware) which may lead to unlawful access to a company’s system. The best penetration tools supply the following options: 1. Easily deployed, configured and used 2. Scans systems easily 3. Distinguishes weaknesses based on severity 4. Verification of weakness automated 5. Test weakness previously found to make sure they are no longer viable 6. Able to produce logs and reports on the weakness of the system Not all weaknesses...
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...Of course in those days, the concern mostly would be access control – who or which goes in or out, badging or identification of personnel and visitors, and checking of goods, supplies and inventories going in and out of the company premises. For sure, the older corporate security officers or security directors would missed “then good old days” when things where simpler in the realm of corporate or industrial security. The last couple of decades saw not just a paradigm shift in corporate security but a total organizational, cultural, procedural, competency and scope change. This is just a short list of the changes or the evolution corporate security or the industrial security officer has been and will be going through. The threats, risks and vulnerabilities then were clear cut and in “black and white.” Today, we have what are called blended threats that encompass a wider spectrum in corporate security. Aside from this, information technology is playing a big role. “Emerging technology is rocking the world of corporate and institutional security directors. Cameras used to be analog. Now they're digital. Access control systems were mostly closed. Now they're becoming more open. (Fickes, 2008)” The truth of the matter now is that the corporate security initiative has gone through new heights considering it faces a lot of challenges. First amongst its major concerns are...
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...Sitkalidak as it was being moved south has led to a full review of the whole programme by the US Interior Department. There are demands for a full scale Congressional inquiry. The damaged rig, one of the few specially equipped to work in the Arctic – will not be easy to replace in time for the next drilling season. None of the incidents has actually caused a significant environmental problem, which is why I use the words “relatively small”. But the Arctic is different. The area is stunning and within easy reach of the US news media. If a spill did occur, the risks are enormous. Lloyd’s of London put it: “Cleaning up any spill in the Arctic, particularly in ice-covered areas, would present multiple obstacles, which together constitute a unique and hard to manage risk.” When television news shows, the daily papers and well read magazines start running sequences of stories against a company, the physical risk is compounded by reputational damage. Even the Fox News...
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...The pros and cons of regulating corporate reporting:A critical review of the arguments Robert Bushman, Wayne R. Landsman Accounting and Business ResearchVol. 40, Iss. 3, 2010 Introduction There were a series of scandals in the UK in the 90’s which resulted in the collapse of Barings Bank, due to this the Financial Services Authority changed the structure of financial regulation that consolidated regulation responsibilities. The aftermath of the financial crisis of 2007 to 2009 has drawn the financial accounting standard setting into the orbit of political processes focused on restructuring the regulation of the world’s financial markets. The crisis has ignited worldwide debate on issues of systemic risk and the role played by financial regulation in creating exacerbating the crisis. There have been proposals for how to regulate the financial markets and financial institutions should be changed to ease the potential for large scale financial meltdowns in the future. There are many aspects of the financial system under debate, including the alleged role played by financial accounting standards in deepening the trajectory of the crisis. The crisis has forced politicians, regulators and economists to scrutinise financial accounting standards and create pressure for change, which creates an opportune moment to consider how to organise the analysis of efficient regulatory choice. This paper lays out the basic arguments that have been put forth both for and against...
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...Financial Institutions Center Derivatives and Corporate Risk Management: Participation and Volume Decisions in the Insurance Industry by J. David Cummins Richard D. Phillips Stephen D. Smith 98-19 THE WHARTON FINANCIAL INSTITUTIONS CENTER The Wharton Financial Institutions Center provides a multi-disciplinary research approach to the problems and opportunities facing the financial services industry in its search for competitive excellence. The Center's research focuses on the issues related to managing risk at the firm level as well as ways to improve productivity and performance. The Center fosters the development of a community of faculty, visiting scholars and Ph.D. candidates whose research interests complement and support the mission of the Center. The Center works closely with industry executives and practitioners to ensure that its research is informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. Copies of the working papers summarized here are available from the Center. If you would like to learn more about the Center or become a member of our research community, please let us know of your interest. Anthony M. Santomero Director The Working Paper Series is made possible by a generous grant from the Alfred P. Sloan Foundation Derivatives and Corporate Risk Management: Participation and Volume Decisions in the Insurance Industry By J. David Cummins Wharton School, University...
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...companies and business which requires an efficient and low-cost execution of risk analysis. Their business model was based on short-term software leasing. The company leased clients a CD containing a risk management application priced at $30000 annually per user and was password protected, after that clients paid by the month for the new password. Organizational Structure Since RiskMetrics Group was a new company, that formerly was a subsidiary of J.P Morgan, Berman used FLAT organizational structure. There were pro’s and con’s by using this kind of organizational structure: Competitive Advantage One of the major competitive advantage of RMG is its payment method. They use leasing payment method to attract costumer and make the costumer financial burden lighter. II. TIME LINE Early 90’s The RiskMetrics Group started as an in-house division of J.P. Morgan, the institutional investment bank. Dennis Weatherstone, chair of Morgan in the early 1990s, wanted a simple, concise daily report that measured the company’s proprietary risk at the end of each day. Why? Because the needs for accurate and clear measure of exposure to market volatilities. In the wake of such financial disasters such as Orange County, Barings, Daiwa and Showa Shell, banks and financial service firms recognized the need for accurate, clear measures of exposure to market volatility. The risk management tool known as value-at-risk, or VaR, grew out of this daily report. VaR attempted to answer the question...
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...Guide Work-related stress What the law says ‘Stress at work is a major issue … together we can successfully manage and prevent it.’ Health and Safety Executive (HSE) ‘Whatever your industry, size of business or location, there are things you can do for the health and well-being of your employees.’ Health, Work and Well-being ‘Work can have a positive impact on our health and well-being. Healthy and well-motivated employees can have an equally positive impact on the productivity and effectiveness of a business.’ Acas ‘Managers need to know what stress is; and also understand what skills, abilities and behaviours are necessary to manage employees in a way that minimises work-related stress.’ CIPD Acknowledgements This guide was written and conceived by John Hamilton, Head of Safety, Health and Wellbeing at Leeds Metropolitan University and a visiting lecturer in health and safety law at Salford Law School, University of Salford. info@stressguidance.org www.stressguidance.org Contents Introduction 2 In this guidance 3 Identifying a problem 4 Preventing harm 6 Protecting individuals 7 Managing the workplace 8 The Management Standards for Work-related Stress 10 Managing stress checklist 11 Further reading 12 About this guide 13 Work-related stress: What the law says 1 Introduction This guidance summarises the legal duties that employers Statutory...
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...isn’t one single shift... as much as an avalanche of ceaseless change... creating unprecedented disruption and dislocation.” Given that a crisis normally occurs without prior warning, it is therefore imperative that certain measures and procedures are put in place that can expedite a cure and thereby reduce the impact so that normality can be restored. For there to be effective crisis management, a robust risk management structure must be instituted within the organisation and must form an integral part of the ongoing corporate governance monitoring framework. A company should learn from previous incidents and incorporate preventative as well as curative measures into any risk assessment. The risk oversight function of the board has gained immense importance in the last few years, mainly due to the collapse of the financial sector in 2008. Today, risk management has become even more critical and challenging. Companies are now confronted with risks that are more complex, interconnected and potentially devastating than ever before. BP’s ostensible lack of consideration for the risks involved in exploration drilling contributed to large-scale disasters which, in turn, highlighted a catalogue of corporate governance failures. The repercussions have been multifold as liabilities in the form of cleanup costs and reimbursements for lost livelihoods continue to mount. Alongside this, shareholder confidence has waned considerably – BP share price suffered its lowest in fourteen years in the...
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