Risk governance: Engage the board

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  • Risk management framework
    • Most people wrongly consider risk management to be a purely defensive activity; they think that risk management is all about risk reduction. On the contrary, risk-taking is essential in any organisation. This week you will learn how to create a risk management framework that both creates and protects value, supporting the achievement of your organisation’s objectives. You will also gain insights into common biases that prevent individuals and organisations from managing risk well, as part of the overall suite of influencing capabilities.
  • Foreign exchange risk
    • To better understand the risk management process, you will apply it to a particular risk that affects many firms operating in global markets: foreign exchange risk. This week you will focus on risk analysis, to demonstrate how foreign exchange movements might impact on firm resilience through the balance sheet. Analysis leads naturally to visualisation and communication of risk concepts – crucial tools for influencing risk management decisions.
  • Governance
    • Corporate Governance is the framework of rules, relationships, systems and processes by which authority and influence are exercised in corporations. Corporate governance also encompasses crucial issues such as accountability of leaders, protection of stakeholder interests, setting of objectives and risk management. This week you will consider the classical Anglo-American governance model for listed firms with its emphasis on shareholder rights. You will compare this with alternative governance models. Finally, you will also consider some contemporary governance challenges such as the ‘curse’ of short-termism and poor design of incentive schemes.
  • Risk governance and culture
    • You will continue your application of the risk management process to foreign exchange risk. This week the focus is on the treatment of risk. You will consider a wide range of options, highlighting the capacity of firms to manage risks through operational decisions rather than relying on derivative contracts. You will conclude with frameworks for risk governance, to ensure that risk is managed effectively.
  • Operational risks
    • Future-focussed firms must always have an eye to emerging risks. These risks can be among the most challenging to manage because they are poorly understood and difficult to quantify. You will use Cyber-risk as an exemplar to draw out practical issues of analysis and treatment. In this context you will also consider the conditions when insurance may, or may not be, an effective solution.
  • Misconduct risk
    • Unfortunately it’s a fact that staff sometimes violate policies and act in a manner that is not in the long-term best interests of stakeholders. This week you will seek to understand the dark side of risk – why people misbehave at work – and what can be done to minimise the possibility of misconduct. Is it due to individual factors (bad apples), characteristics of the workplace (bad barrels) or perhaps characteristics of the whole industry (bad orchards)? How can we influence ourselves and others to behave ethically?