Corporate Risk Management.
Title:
Corporate Risk Management.
Author:
Merna, Tony.
ISBN:
9780470759004
Personal Author:
Edition:
2nd ed.
Physical Description:
1 online resource (442 pages)
Contents:
Corporate Risk Management -- Contents -- 1 Introduction -- 1.1 Introduction -- 1.2 Why Managing Risk is Important -- 1.3 General Definition of Risk Management -- 1.4 Background and Structure -- 1.5 Aim -- 1.6 Scope of the Book -- 2 The Concept of Risk and Uncertainty and the Sources and Types of Risk -- 2.1 Introduction -- 2.2 Background -- 2.3 Risk and Uncertainty: Basic Concepts and General Principles -- 2.4 The Origin of Risk -- 2.4.1 Dimensions of Risk -- 2.5 Uncertainties -- 2.6 Sources of Risk -- 2.7 Typical Risks -- 2.7.1 Project Risks -- 2.7.2 Global Risks -- 2.7.3 Elemental Risks -- 2.7.4 Holistic Risk -- 2.7.5 Static Risk -- 2.7.6 Dynamic Risk -- 2.7.7 Inherent Risk -- 2.7.8 Contingent Risk -- 2.7.9 Customer Risk -- 2.7.10 Fiscal/Regulatory Risk -- 2.7.11 Purchasing Risk -- 2.7.12 Reputation/Damage Risk -- 2.7.13 Organisational Risk -- 2.7.14 Interpretation Risk -- 2.7.15 IT Risk -- 2.7.16 The OPEC Risk -- 2.7.17 Process Risk -- 2.7.18 Heuristics -- 2.7.19 Decommissioning Risk -- 2.7.20 Institutional Risks -- 2.7.21 Subjective Risk and Acceptable Risk -- 2.7.22 Pure Risks and Speculative Risks -- 2.7.23 Fundamental Risks and Particular Risks -- 2.7.24 Iatrogenic Risks -- 2.7.25 Destructive Technology Risk -- 2.7.26 Perceived and Virtual Risks -- 2.7.27 Force Majeure -- 2.8 Perceptions of Risk -- 2.9 Stakeholders in an Investment -- 2.9.1 Stakeholder Identification -- 2.9.2 Stakeholder Perspectives -- 2.9.3 Stakeholder Perceptions -- 2.10 Summary -- 3 The Evolution of Risk Management and the Risk Management Process -- 3.1 Introduction -- 3.2 The Evolution of Risk Management -- 3.2.1 The Birth of Risk Management -- 3.2.2 Risk Management in the 1970s - Early Beginnings -- 3.2.3 Risk Management in the 1980s - Quantitative Analysis Predominates -- 3.2.4 Risk Management in the 1990s - Emphasis on Methodology and Processes.
3.3 Risk Management -- 3.4 The Risk Management Process - Identification, Analysis and Response -- 3.4.1 Risk Identification -- 3.4.2 Risk Quantification and Analysis -- 3.4.3 Risk Response -- 3.4.4 Selection of Risk Response Options -- 3.4.5 Outputs from the Risk Response Process -- 3.4.6 Risk Management within the Project Life Cycle -- 3.4.7 The Tasks and Benefits of Risk Management -- 3.4.8 The Beneficiaries of Risk Management -- 3.5 Embedding Risk Management into Your Organisation -- 3.6 Risk Management Plan -- 3.7 Executive Responsibility and Risk -- 3.8 Summary -- 4 Risk Management Tools and Techniques -- 4.1 Introduction -- 4.2 Definitions -- 4.3 Risk Analysis Techniques -- 4.3.1 Choice of Technique(s) -- 4.4 Qualitative Techniques in Risk Management -- 4.4.1 Brainstorming -- 4.4.2 Assumptions Analysis -- 4.4.3 Delphi -- 4.4.4 Interviews -- 4.4.5 Hazard and Operability Studies (HAZOP) -- 4.4.6 Failure Modes and Effects Criticality Analysis (FMECA) -- 4.4.7 Checklists -- 4.4.8 Prompt Lists -- 4.4.9 Risk Registers -- 4.4.10 Risk Mapping -- 4.4.11 Probability-Impact Tables -- 4.4.12 Risk Matrix Chart -- 4.4.13 Project Risk Management Road Mapping -- 4.5 Quantitative Techniques in Risk Management -- 4.5.1 Decision Trees -- 4.5.2 Controlled Interval and Memory Technique -- 4.5.3 Monte Carlo Simulation -- 4.5.4 Sensitivity Analysis -- 4.5.5 Probability-Impact Grid Analysis -- 4.6 Quantitative and Qualitative Risk Assessments -- 4.7 Value Management -- 4.7.1 Value Management Techniques -- 4.8 Other Risk Management Techniques -- 4.8.1 Soft Systems Methodology (SSM) -- 4.8.2 Utility Theory -- 4.8.3 Risk Attitude and Utility Theory -- 4.8.4 Nominal Group Technique -- 4.8.5 Stress Testing and Deterministic Analysis -- 4.8.6 Tornado Diagram -- 4.9 Country Risk Analysis -- 4.9.1 Country Risk Sources - the Checklist -- 4.9.2 Political Risk.
4.9.3 Financial Risk -- 4.9.4 Organisational Usage of Risk Management Techniques -- 4.10 Summary -- 5 Financing Projects, their Risks and Risk Modelling -- 5.1 Introduction -- 5.2 Corporate Finance -- 5.3 Project Finance -- 5.3.1 Basic Features of Project Finance -- 5.3.2 Special Project Vehicle (SPV) -- 5.3.3 Non-recourse or Limited Recourse Funding -- 5.3.4 Off-balance-sheet Transaction -- 5.3.5 Sound Income Stream of the Project as the Predominant Basis for Financing -- 5.3.6 Projects and their Cash Flows -- 5.4 Financial Instruments -- 5.5 Debt -- 5.5.1 Term Loans -- 5.5.2 Standby Loans -- 5.5.3 Senior and Subordinate Debt -- 5.6 Mezzanine Finance Instruments -- 5.6.1 Bond Ratings -- 5.6.2 Types of Bonds -- 5.7 Equity -- 5.7.1 Ordinary Equity and Preference Shares -- 5.8 Financial Risks -- 5.8.1 Construction Delay -- 5.8.2 Currency Risk -- 5.8.3 Interest Rate Risk -- 5.8.4 Equity Risk -- 5.8.5 Corporate Bond Risk -- 5.8.6 Liquidity Risk -- 5.8.7 Counter-party Risk -- 5.8.8 Maintenance Risk -- 5.8.9 Taxation Risk -- 5.8.10 Reinvestment Risk -- 5.8.11 Country Risk -- 5.9 Non-Financial Risks Affecting Project Finance -- 5.9.1 Dynamic Risk -- 5.9.2 Inherent Risk -- 5.9.3 Contingent Risk -- 5.9.4 Customer Risk -- 5.9.5 Regulatory Risk -- 5.9.6 Reputation/Damage Risk -- 5.9.7 Organisational Risk -- 5.9.8 Interpretation Risk -- 5.10 Managing Financial Risks -- 5.10.1 Construction Delay -- 5.10.2 Currency Risk -- 5.10.3 Interest Rate Risk -- 5.10.4 Equity Risk -- 5.10.5 Corporate Bond Risk -- 5.10.6 Liquidity Risk -- 5.10.7 Counter-party Risk -- 5.10.8 Maintenance Risk -- 5.10.9 Taxation Risk -- 5.10.10 Reinvestment Risk -- 5.10.11 Country Risk -- 5.11 Risk Modelling -- 5.12 Types of Risk Software -- 5.12.1 Management Data Software Packages -- 5.12.2 Spreadsheet-based Risk Assessment Software -- 5.12.3 Project Network-based Risk Assessment Software.
5.12.4 Standalone Project Network-based Risk Assessment Software -- 5.13 Summary -- 6 Portfolio Analysis and Cash Flows -- 6.1 Introduction -- 6.2 Selecting a Portfolio Strategy -- 6.3 Constructing the Portfolio -- 6.4 Portfolio of Cash Flows -- 6.5 The Boston Matrix -- 6.6 Scenario Analysis -- 6.7 Diversification -- 6.7.1 Diversification of Risk -- 6.8 Portfolio Risk Management -- 6.8.1 Bundling Projects -- 6.8.2 Considerations -- 6.8.3 Bundling Projects into a Portfolio -- 6.9 Cross-Collateralisation -- 6.10 Cash Flows -- 6.10.1 Cash Flow Definition for Portfolios -- 6.10.2 Reasons for Choosing Cash Flow Curves -- 6.10.3 Projects Generating Multiple IRRs -- 6.10.4 Model Cash Flow -- 6.11 An Example of Portfolio Modelling -- 6.11.1 Financial Instruments -- 6.11.2 Development of the Mechanism -- 6.11.3 Spreadsheets -- 6.11.4 A Portfolio of Oil and Gas Projects -- 6.12 Summary -- 7 Risk Management at Corporate Level -- 7.1 Introduction -- 7.2 Definitions -- 7.3 The History of the Corporation -- 7.3.1 Equity Capital of a Corporation -- 7.4 Corporate Structure -- 7.5 Corporate Management -- 7.5.1 The Corporate Body -- 7.5.2 The Legal Obligations of Directors -- 7.5.3 The Board -- 7.5.4 The Composition of the Board -- 7.6 Corporate Functions -- 7.6.1 Corporate Governance -- 7.7 Corporate Strategy -- 7.8 Recognising Risks -- 7.9 Specific Risks at Corporate Level -- 7.10 The Chief Risk Officer -- 7.11 How Risks are Assessed at Corporate Level -- 7.12 Corporate Risk Strategy -- 7.12.1 Health and Safety and the Environment -- 7.13 Corporate Risk: An Overview -- 7.14 The Future of Corporate Risk -- 7.15 Summary -- 8 Risk Management at Strategic Business Level -- 8.1 Introduction -- 8.2 Definitions -- 8.3 Business Formation -- 8.4 Strategic Business Units -- 8.4.1 The Need for Strategic Linkages -- 8.4.2 The Wrappers Model -- 8.4.3 The Business Management Team.
8.4.4 Strategic Business Management Functions -- 8.4.5 Typical Risks Faced by Strategic Business Units -- 8.5 Business Strategy -- 8.6 Strategic Planning -- 8.6.1 Strategic Plan -- 8.6.2 Strategy and Risk Management -- 8.7 Recognising Risks -- 8.7.1 Specific Risks at Business Level -- 8.7.2 Typical SBU Organisation -- 8.8 Portfolio Theory -- 8.8.1 Modern Portfolio Theory -- 8.8.2 Matrix Systems -- 8.9 Programme Management -- 8.10 Business Risk Strategy -- 8.11 Tools at Strategic Business Unit Level -- 8.12 Strategic Business Risk: An Overview -- 8.13 Summary -- 9 Risk Management at Project Level -- 9.1 Introduction -- 9.2 The History of Project Management -- 9.2.1 The Early Years: Late Nineteenth Century -- 9.2.2 Early Twentieth-century Efforts -- 9.2.3 Mid Twentieth-century Efforts -- 9.2.4 Late Twentieth-century Efforts -- 9.3 Definitions -- 9.4 Project Management Functions -- 9.4.1 The Project Team -- 9.4.2 Project Risk Assessment Teams -- 9.4.3 Project Goals -- 9.5 Project Strategy Analysis -- 9.6 Why Project Risk Management is Used -- 9.7 Recognising Risks -- 9.7.1 Specific Risks at Project Level -- 9.7.2 What Risks are Assessed at Project Level? -- 9.7.3 Project Managers and Their View of Risks -- 9.8 Project Risk Strategy -- 9.9 The Future of Project Risk Management -- 9.10 Summary -- 10 Risk Management at Corporate, Strategic Business and Project Levels -- 10.1 Introduction -- 10.2 Risk Management -- 10.3 The Risk Management Process -- 10.4 Common Approaches to Risk Management by Organisations -- 10.5 Model for Risk Management at Corporate, Strategic Business and Project Levels -- 10.6 Summary -- 11 Risk Management and Corporate Governance -- 11.1 Introduction -- 11.2 Corporate Governance -- 11.3 Corporate Governance Approach in France -- 11.4 Corporate Governance Approach by the European Commission.
11.5 Corporate Governance and Internal Control.
Abstract:
Risk management is one of the most important issues facing organisations today. With an increasing pace of change, customer demands and market globalisation, having a process in place to identify, assess and manage major business risks is essential to survive in today's market. Getting the balance right is key; the opportunities are as important as the threats. Fully updated from the first edition, this book compares and contrasts tools and techniques used in risk management, showing readers how to implement a generic risk management mechanism. Including up-to-date guidance on new regulations in corporate governance, including updates on the Turnbull and Sarbanes Oxley acts, the Higgs report and European legislation, the book presents a fully updated and expanded model framework for analysing risk at corporate, strategic business and project levels. Typical risks affecting organisations - including pension-related issues associated with equity risk - are discussed, along with sections on the evolution of risk management and its processes, corporate and project finance, portfolio risk management and cash flow analysis. There are also fully updated and expanded sections on financial modeling - especially the use of Excel as a powerful financial tool - and derivatives, including interest rate, RPI swaps and foreign exchange. Combining theory with practical examples and case studies - including interviews with over 90 corporate organizations in the UK and overseas - this book is an essential guide to the commercial aspects of risk management and its implementation, at all levels of an organisation. "An excellent well structured book which leads the reader through the broad spectrum of risk management essential in today's business environment. The authors concisely address the key areas of identification, assessment and management/planning
relevant for the corporate risk manager, as well as those issues specifically relevant to those involved in project driven endeavours." -Gareth Owens, Investment professional, London based commodities principal investment team "This important new edition of Corporate Risk Management updates the highly successful first offering by Merna and Al Thani. The latest research and opinions on corporate governance codes and analytical techniques are described with superb clarity. The wide range of case studies from food and tobacco to pharmaceutical and oil industries help to identify the generic issues that are fundamental to corporate risk management." -Professor Tim McCarthy, University of Wollongong, NSW Australia.
Local Note:
Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2017. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.
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Electronic Access:
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