Risk Management

Getting risk right:  Highlights the importance of risk governance, alignment with business strategy and risk management capabilities in effective risk management.

Source: The Wall Street Journal

 ERM at a glance:  A one page overview of the enterprise risk management process. An excellent way to communicate the risk management process to stakeholders, board, management and staff.

Source: InConsult

 Confessions of a risk manager:  Why did banks become so overexposed in the run-up to the credit crunch? A risk manager at a large global bank - someone whose job it was to make sure that the firm did not take unnecessary risks -explains in his own words.  A must read for all risk managers.

Source: The Economist 

Wall Street aims to clean up risk among its banks:  Looking to avert the next financial-market meltdown, a group of Wall Street executives have proposed a series of far-reaching reforms aimed at cracking down on the risks taken by big banks

Source: Financial Post

Out of sight out of mind.  The need for a balanced risk management framework.

In 2006, we released our inaugural report into risk management practices in NSW local government.  The results highlighted that whilst Councils were managing risks, there was not enough focus on ‘non insurable’ risks.  Only 12 months later, a number of NSW councils lost money due to investment exposure in the US sub-prime property market and others were subject to government enquiries – clearly these risk events, including reputation, were not insurable.  Today, many Councils can see the need for a broader risk management program.  Similarly, the US corporate world post-Enron has heavily focused on managing the risks around financial reporting.  The numbers had to be correct or else a 20 year jail sentence was immanent.  US companies spent millions of dollars managing their financial reporting risks– by many (mainly financial institutions) failed to see emerging credit risk exposure and consequently have been exposed to major losses. 

An effective risk management program should consider the organisation activities and environment.  It must strike the right balance between risk treatment and risk transfer.  Establishing context is often difficult, but it remains one the most important stages in the risk management process.  If you have any risk management, corporate governance, audit or business continuity matters you would like discuss, contact InConsult on 02 9241 1344.

Business Continuity and Resilience

Supply chain disruptions and financial loss: New US research has revealed that 99% of companies have suffered supply chain disruptions over the past year due to multiple supply chain risk management gaps and 58% have suffered financial losses from supply chain disruptions.

Source: MarketWatch.com

Governance & Compliance

ASIC acts against directors of failed companies:  ASIC has disqualified a further six directors from managing corporations following their involvement in failed companies and in the 2007–08 financial year, ASIC disqualified 52 directors from managing corporations for periods totalling 175 years.

Source: ASIC

Internal Audit

Combating fraud:  A team of more than 20 experts from the public and private sectors as well as academia outline five principles organisations can adopt to confront the challenges of preventing and detecting fraud.

Source: The Institute of Internal Auditors

Ex-CFO used spreadsheets for fraud:  A former CFO used "hidden rows" to keep falsities from hard copy and covered up information by placing it in "white font."  Why? The motive for the fraudulent scheme was his desire to rise through the management ranks to become the president of the division and, eventually, the chief executive officer

Financial Management

What keeps CFO’s up at night?  With oil prices hovering at around $140 a barrel, the cost of fuel has officially registered on finance executives' radar screens of top 10 external concerns.

Source: CFO.com

CFO’s - how to survive in the age of risk:  Faced with threats from all quarters - recession and credit crunch, heated global competition - companies are making intensive risk management a top priority, and once again the CFO is in the front line.

Source: CFO.com

Occupational Safety, Health & Environment

Toll-booth operator gets $260,000 for taking cash:  A rubbish-tip employee has been awarded $260,000 in damages after being injured by having to repeatedly stretch out his arm while operating a toll booth.

Source: news.com.au

OHS Hazards: Hierarchy of hazard controls: Personal Protective Equipment (PPE) is one way to reduce injury, but Hazards must be controlled using a range of methods. WorkCover NSW lists various strategies, in order of preference, which should be considered in hazard control.

Source: WorkCover

Government

UK gets a ‘National Risk Register’: The Cabinet Office has published a National Risk Register, which sets out the government’s assessment of the likelihood and potential impact of a range of different risks threatening the UK.  Businesses and Australian Federal, State and Local Governments will find a lot of useful information and some relevance.

Source: Cabinet Office

NSW Councils at financial breaking point:  A new report reiterates that councils are at financial breaking point and the only solution is the removal of rate pegging and increased support from the State and Federal Governments.

Source: LGSA

Essential Elements of ERM in Local Government:  The August/September 2008 issue of Council Manager magazine will feature our paper that was delivered at the 2007 Benchmarking Best Practice in Local Government conference in Sydney in July 2008. The article looks at 7 essential elements and provides some practical tips and examples.

Financial Services

Review finds risk controls inadequate: Staff sacked:  ANZ has sacked two of its staff in the fallout of the Opes Prime crisis, after a review of the bank's securities lending operations found risk controls were inadequate.

Source: The Australian Business

Just how safe are our banks? APRA warns that "Nobody gets a free pass in the risk-management game" after two of Australia's top lenders unveiled a double-whammy of bad news that wiped billions of dollars off banking stocks.

Source: news.com.au

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