Two months ago we started our examination of the seven “S” model, now at last we can complete this area and start to use it as a risk management tool. We were interrupted because of the great news from the AIRM about the CPRM and my need to get the concept of stakeholder value rather than shareholder value into our view of the intrinsic valuation of a successful business. ...[ Read More ]

For the last two months we have looked at ensuring a framework for survival that can be overlaid onto a business to give the best chance of being in existence at the start of the recovery. The jury is still out on how deep the fall will be; indeed some are arguing that we have almost bottomed. ...[ Read More ]

Have you wondered why the words ‘risk management’ are heard so widely today? Have you considered what can be achieved with an understanding of the term? Indeed, is the term used or misused in today’s business world? ...[ Read More ]

Society is evolving; if enterprises do not change to meet the acceptable community standards then they will disappear from the industrial landscape. Government is the instrument of change, in other words they are charged with the reflection and implementation of community standards across society as a whole. Business needs to apply the principles of the management of risk in order to stay in front of compliance requirements. ...[ Read More ]

Duration is the effective maturity of a security because it can account for the interim cash flows. Traditionally duration as a risk management tool has focused on bond portfolios, however Melanie Ferger, an exchange student from Germany looked at the tool in relation to asset and liability management from a financial institution’s viewpoint. The theme of her project sought to validate her hypothesis that duration could be used as an effective interest rate management tool for the liability side of a financial institution’s balance sheet. ...[ Read More ]

Effective risk management results in cultural change and a significant shift in the way business is done. ...[ Read More ]

The old ways of the last century are no longer acceptable; the focus of shareholder value is an old measure of success that has run its day. Unfortunately most of the large companies in existence today have not realised this yet and continue on the pathway to future destruction. The attitude of financial markets reinforces this delusion ...[ Read More ]

To try and define the concept of risk management so that common ground can be set, ...[ Read More ]

Bankers have a duty to contribute to the development of risk management as a separate business discipline. MICHAEL VINCENT of Monash University, Australia, looks at some of the tools used by financial institutions – duration, value of risk, value at risk – and how the management of risk should be structured ...[ Read More ]

The above describes a very narrow definition of corporate governance, that is the ability of the owners to ensure the managers act in accordance with the guidelines of the company and have accountability sheeted home. ...[ Read More ]