Search results

Companies face a wide number of risks and need to have in place appropriate measures and techniques to be able to identify, manage, and monitor risks. Risk management is a fundamental responsibility of the corporate governance structure of an organization; it means managing all risks on a holistic basis, all together rather than just one, through an appropriate and systematic process. This chapter provides an overview of enterprise risk management in the United Kingdom. It presents key information on the economic system of the United Kingdom, emphasizing the role of small and medium enterprises, and presents country macroeconomic highlights. It provides a summary of regulation, practices, and authorities; it presents the key milestones of the regulation on corporate governance and reporting in the United Kingdom, and stresses the importance of corporate governance mechanism in companies' enterprise risk management practices. Further, it discusses the importance of transparency and disclosure in the context of enterprise risk management, specifically the relevance of risk management and internal control related disclosure in the annual reports and accounts. Finally, it reviews the growing academic research on enterprise risk management and previous studies on risk disclosure practices in companies' reports.

The governance of capital market institutions did not receive much interest compared to their banking sector counterparts, partly due to their different ownership structures. Recent trends; increased competition, technological advances, structural changes, globalization, all had their share of impact on governance systems of capital markets institutions particularly on exchanges. Corporate governance of non-financial firms and capital markets institutions differ in several ways. Firstly the role of risk management differs since they may impose systemic risks to the financial system. Secondly well-implemented governance structures and processes are required but are not sufficient in capital markets since there are several conflicts of interests to be addressed. Therefore whether and how effectively they function is what matters. Thirdly the governance structures of such institutions exhibit different effectiveness on their decisions.The governance of FIs in capital markets is discussed in terms of board structure and management, risk governance, supervisors, shareholders, executive compensation, role of regulators, authorities and values and culture. The role of stock exchanges in corporate governance are discussed separately in terms of implementing corporate governance codes, demutualisation and its impact on regulations, transparency and accountability issues and the effects of M&As among exchanges. Market needs strong analytical tools and reliable benchmarks to assess governance risk. The corporate control and the regulation of the institutions by the exchanges when the corporations (regulated) are the competitors of the exchanges (regulators) or owned by the stockholders of the exchanges must be addressed. The risk of regulatory arbitrage, calls for the need of harmonisation among regulators. Better regulation of FIs and greater global coordination among regulators are seen as the most two important issues to prevent another crisis.

This exploratory study attempted to determine the level of formalization and implementation of corporate governance and risk management practices, and the role of human resource management in the design and formulation of such practices. This study also attempted to derive some patterns of association among the variables studied, including the degree to which specific human resource management practices were linked with the overall corporate governance and risk management objectives. Human resource management was consulted from time to time during the formulation of strategic plan, the design of behavioral control mechanisms, and the development of risk management guidelines and formal corporate culture programs. However, it was consulted only during implementation of corporate governance structures at the board level. Generally, human resource management involvement in the formulation of corporate governance and risk management mechanisms was related to the degree of formalization and implementation of such mechanisms, but not to the degree of congruence of human resource management functions with corporate governance and risk management objectives. However, the degree of formalization and implementation of corporate governance structures at the board level was related to the degree of congruence of human resource management functions with corporate governance and risk management objectives and the driver measures of performance. The latter was likewise related to mechanisms of behavioral control.

Risk governance is being successfully inserted into scientific and political agendas as a way to understand and address complex problems, such as health problems that have both social and ecological dimensions. However, to date, the debate on risk governance has remained rather conceptual. This chapter addresses these lacunae through describing research that was conducted on the Flemish environmental health governance arrangement and draws on this empirical case study to suggest ways that risk governance can be put into practice.

The case study analysis was conducted through a mixed methods study that combined document analysis and data gathered through 22 in-depth interviews with environmental and health scientists as well as policymakers.

This research shows that the Flemish environmental health risk governance arrangement has succeeded in increasing the exchange of information between: (1) governments at a variety of levels; (2) scientists, policymakers and the general public and (3) environmental and public health civil servants. The analysis also provides insights into some shortcomings and makes recommendations for ameliorating this arrangement: (1) the integration of environmental health objectives into all relevant policy domains, (2) the need for additional research into environmental health indicators and (3) the facilitation of the co-production of knowledge and multi-actor governance.

Empirical contributions and analysis about risk governance and policy formation processes are not often conducted. The added value of this Flemish case study is that it presents an example of good practice from which lessons for future risk governance arrangements can be drawn.

In recent years, there have been calls on African countries to develop disaster governance system that recognises the complex nature of disaster events and reflects how their impact can prevent governments from achieving their development objectives. This chapter examines Ghana’s response to the calls by exhuming disaster management policies and the missing links in their implementation. This research was approached by comprehensively reviewing literature related to the subject. The review was supported by field-based interviews involving key stakeholders, some of whom are directly involved with disaster policy planning and implementation. The results show that even though there are several disaster management policies, they are fragmented and found within several institutions, a situation that has created some missing links in their implementation. For instance, poor collaboration and coordination among disaster management institutions hampered efforts towards disaster risk prevention, preparedness and mitigation which are viewed as cross-cutting themes in disaster management. Even more intriguing, critical stakeholders such as community groups who often play important roles in rescue and recovery operations and continue to render humanitarian services after official operations have ended are excluded from the everyday decision-making processes. Empirically, this chapter draws attention to how endogenous interventions that are deeply rooted in the culture of the people that could support well-crafted disaster legislations are often ignored. This chapter concludes that these missing links need to be addressed in order to make Ghana resilient to disaster.

Since the mid-1990s, enterprise risk management (ERM) has proliferated in both the private and public sector as a holistic, enterprise-wide approach to risk management. In this chapter, we begin by exploring the economic, regulatory and professional context of ERM practices in Norway. To gain an understanding of the current state of ERM practices among Norwegian entities, we have conducted a survey among members of the Institute of Internal Auditors (IIA) Norway. Based on the survey data, we go on to analyse the perceived maturity of risk management practices of the surveyed organizations, as well as their integration of risk management with governance mechanisms and accounting practices. Four main findings emerged from the survey. We firstly observed that a majority of the respondents perceived that they had implemented ERM. Secondly, the average maturity of risk management practice is at a medium level, with ambitions to improve it further in the future. We further observed that a majority of the organizations have established risk management governance structures regarding the roles of risk management. However, there is still work to be done in relation to risk management functions in order for them to gain more attention and influence in the organizations. Finally, we find that risk management is more integrated with reporting processes than with strategic and performance planning processes, suggesting a more reactive than proactive approach to managing risks.

The aim of this research is to examine the evolvement of enterprise risk management (ERM) in Sweden. We examine how the Swedish legal and self-regulatory framework influences ERM development. We examine the impact of ERM research on practice, the professionalization of ERM facilitated by professional bodies and associations, and its promotion by the evolvement of principles and practices. This research is based on interviews with national experts ¹ at the policy level as well as four field visits to large Swedish organizations in order to deepen our understanding of ERM integration with corporate governance, accounting, and disclosures. We find that: There is no obvious misalignment between the legal and self-regulatory framework and ERM practices in organizations; ERM is more integrated with disclosures than with governance and accounting practices; decentralized organizations experience more difficulty in integrating ERM compared to centralized organizations; no tensions were evident between compliance and business partnering in the four field visits, enabling ERM integration; regulation can be useful in promoting minimum standards for ERM integration. This study adds to our understanding of ERM integration and the role of unique governing contracts in linking profitability, growth and risk from an ERM perspective. It also deepens our understanding of ERM integration as a multidimensional construct.

The aim of this chapter is to investigate the relationship between ethics, risks of compliance failure and strategic value of global responsibility for BRICS companies. The first part of the chapter adopts a theoretical approach: it introduces and analyzes the key role of compliance risk management for sustainable and successful development of companies. The second part of the chapter uses an empirical approach, based on the case study method. The chapter focuses on the BRICS. The chapter demonstrates that mere formal compliance with laws, recommendations, and internal codes is not sufficient for companies that want to be responsible and attract stakeholders’ consent and resources. A shared background of ethical principles is required for a proper understanding of the rules, in order to prevent the risk of compliance failure and limit the global risk exposure of a company. Due to the business perspective adopted in the research, this chapter leaves out the sociological aspects regarding how to create, spread, and strengthen the culture of compliance within a company. The chapter encourages companies to connect ethical principles and compliance with the rules. Indeed, a lack of ethics in business operations, obscured by formal compliance, often results in indirect negative impacts on stakeholder relationships, so it is only a futile attempt to act responsibly. The originality of the chapter consists in suggesting the adoption of a responsibility-oriented approach for compliance risk management.

This study investigates the impacts of operational risks and corporate governance on bond yield spreads, examining their impacts on bond yield spreads during the COVID-19 pandemic. The results indicate that operational risks significantly raise yield spreads, especially for high-leverage firms. Moreover, a higher independent director percentage reduces debt costs. Furthermore, the results reveal more pronounced effects of operational risks on yield spreads during the COVID-19 pandemic, with these risks increasing the financing costs for large firms. When the effect of the independent director percentage on the yield spreads increases, this consequently raises the debt costs for large firms.

This book is about risk management in the public sector, in general, and particularly risk management in public sector organisations. Risk management in the public sector is a much broader topic than risk management in public sector organisations because it touches on many issues of a public nature that are not the direct or sole responsibility of any specific public organisation. Sometimes a public organisation must deal directly with such risks, but often laws and regulations can adequately address broader public risk issues, governments can participate indirectly and behind the scenes, or participation can be in collaboration with private and non-profit organisations. In some cases, government organisations play no role at all.

This chapter focusses on an important contextual issue; the environment in which risk management is practised in the public sector and in which public risks arise. In much of this book, the unique or unusual attributes of the public sector are shown to profoundly affect risk and the forms and functions of risk management. This chapter introduces some of these attributes and highlights their likely impact on risk management. The public environment is one with movable boundaries, and it essentially encompasses any action or object that a society considers public. Over time, attitudes can change about publicness, but a key point is that while government entities occupy part of the public environment, they are not its only inhabitants.