Non financial institutions

It wasn’t so long ago that the approach to risk measurement and management in financial institutions was held to be superior to that employed by non financial institutions. The significant destruction of value, evidenced by mounting losses and plummeting share prices in financial stocks, is a reminder of what happens when risk taking is not understood and/or held in check. However it would be wrong to infer from this that the approach adopted by non financial institutions with regards to risk is any more appropriate.

Outside the financial institutions, corporate management teams tend to focus on traditional performance measurement techniques – risk-adjusted metrics seldom figure in day-to-day decision making and performance assessment. This can lead to a pattern of sub-optimal decision-making, including undesirable and unnecessary costly surprises from miscalculated project or business activity, or that business opportunities are missed because of irrational perceptions of risk.

Satisfying the divergent interests of stakeholders is an ongoing challenge for non financial institutions. There are, however, significant opportunities for executives who can select options that protect existing value, divest those parts of the enterprise that no longer deliver the required return on capital employed and integrate new business consistent with the strategic objectives. A holistic approach, or enterprise-wide view, is the means by which the Board of Directors and executive management can best manage risk to protect and grow shareholder value.

We work at various levels in an enterprise to assist to develop an approach and awareness consistent with senior management’s vision and philosophy of risk measurement and management. We work with: the Board of Directors to help develop their knowledge to engage in their dialogue with senior management around risk matters; with Chief Executive Officers to deliver management information so that they are better informed about risk when setting and communicating strategic and operational objectives; with Chief Risk Officers to develop an appropriate governance structure and risk metrics; with Chief Financial Officers to broaden their understanding of risk given the increased expectations from stakeholders; with Group Risk to assist develop a proportionate response to enterprise risk; with Internal Audit to assess the effectiveness of internal controls as risk mitigants, with Treasurers to extend their focus of risk beyond the traditional short term measures adopted; and with Business Unit and Business Line senior management to develop their understanding and sophistication of risk measurement and management of risks for which they are responsible.

With its deep risk experience, we are well placed to help enterprises plan for and address the multiple challenges faced in a volatile market place. We are working with clients to help improve their approach to risk measurement and management, and can draw on many years of experience in implementing improvement programs across diverse industries.


Clients can draw on our key service offerings:

Organisation and Governance


Business Processes and People


Information Management


Measurement and Analytics


If you would like a demonstration or details on any of our solutions, contact us.

Solution

Definio Reply™

Definio Reply is an open and flexible system for Financial Risk and Performance Management.

Learn more about Definio Reply™

Case study

Facilitating improvements in the speed and accuracy of Basel II reporting, with the aim of allowing reporting & collateral management teams to move steadily from “fire control” to more strategic planning and development of new processes and systems.

Specialist risk measurement and management

Reply provides specialist risk measurement and management services in the following areas: