Financial Risk Management
Financial Risk Management
OBJECTIVES
- Identify their personal role as risk managers
- Demonstrate how to understand risk at all levels of an organisation in an integrated fashion. Business strategy risk, finance risk, operational risk, asset impairment, franchise risk, and competitive risk are among the risks to be discussed. Risks will be measured in quantitative and qualitative terms
- Alternative counter-measures will be defined and assessed. Suitable comprehensive risk models will be reviewed including the OECD model, COSO model, ISACA model, among others
- Place financial risk management into the overall governance model
- Developing an understanding of the Board’s perspective for financial risk
- Recognize the C-level executives’ perspectives for financial risk
- Understand the significance of higher level risk perspectives translated into business unit risk management and functional management
- Personalize risk management into their personal responsibilities
- Integrate non-financial risks and financial risk concepts
- Accept their personal risk profile and determine their ‘appetite for risk’
- Challenge the status quo of risk management in their area of responsibility
WHO SHOULD ATTEND?
- Personnel who are seeking to guide their business to plan and achieve long term superior performance taking into account the risks that may affect the financial objectives
- Employees in any functional area who are seeking to improve the operational performance of their units, or gain an insight into: risk assessment, risk mitigation, and any other risk analyses that affect decision making
- Anyone who has the need to upgrade their understanding of risks in decision making
COURSE OUTLINE
DAY 1 – Corporate Governance and Financial/Enterprise Risk Management
- Introduction to Corporate Governance
- The need for Corporate Governance
- Elements of Corporate Governance
- Role of Financial Risk Management / Enterprise Risk Management
- Performance measures – the need for FRM/ERM
- Quantitative and qualitative risks
- Developing FRM/ERM strategy – do we need a CRO?
DAY 2 – Understanding Financial/Enterprise Risk Management
- Understanding uncertainty and risk/opportunity
- Identifying strategic financial risks
- Identifying operational risks
- Identifying functional financial risks
- Assessing financial risks in each perspective
- Finding our personal risk profile (appetite for risk)
- Clarifying desired outcomes, expected outcomes, and actual outcomes
DAY 3 – Financial/Enterprise Risk Management Implementation
- Implementing, communicating, and cascading Financial/Enterprise Risk Management
- Does the OECD model work?
- Can COSO help?
- Does the ISACA model help functions other than IT?
- What personal risk elements enter the FRM/ERM?
- Auditing the FRM/ERM
- Implementation challenges: are we ready to change our lives to risk management?
DAY 4 – Measurement and Decision Making in FRM/ERM
- Quantifying the world FRM/ERM
- Measuring the unmeasureable = quantifying the qualitative
- Defining FRM/ERM metrics that work in your organization
- Do we speak the natural language of FRM/ERM?
- Recognizing that we are rewarded for risk taking not risk elimination!
- Allocating resources to support strategic intent recognized in ERM
- Recognizing that the FRM/ERM can clarify the business case for risky decisions
DAY 5 – Financial/Enterprise Risk Management that makes a difference
- Compliance, Explanation, and reporting of ERM
- Issues to define for a difference include the usual ones: shareholder value, compensation, Modeling and Monte Carlo simulation techniques, real options, liability management, Value at Risk (VAR), compliance risk management, political risk, project financing risk, insurance risk, interest rate risk, foreign currency risk, hedging, derivatives, and commodity price risk among others.
- Issues to define for a difference include the less usual ones: Joint ventures, alliances, product liability, environmental risk, outsourcing risk, growth risk, R&D risk, natural disasters, catastrophic risks, supply chain risk, reputation risk, and psychology of risk among others
- Personal acceptance of the risk manager role of each participant
- Mutual commitments made to take back to organizational unit