Risk Management Articles

Latest risk management articles to help you better understand the complex world of Risk management. If you would like to submit your articles of interest, do write to manoj.jain@riskpro.in and we will surely include your articles in this section.


Bharati has been axed by IRDA

There is a news article today that Bharati's insurance firms have been fined a penalty of Rs 20 Lakhs by IRDA. This is for a serious non compliance in company laws relating to reporting ownership changes.

So, how did this happen. What could have prevented this. Simple...Risk Management and Compliance Management Framework. Just like you cannot remember 100 things you do in a day, and use reminder tools such as calendar, Task List of outlook, you cannot remember what needs to be done when as the business grow more complex.

What will our New Banks look like?

Here is summary of the recent norms issued in the Discussion Paper released by RBI on Aug 11, 2010. The norms detail out the pros and cons of what our new Banks will look like.

The new Era of Banking is likely to have significant impact on the Banking Industry.

Download New Bank Look - Summary

Weather Derivatives and why India needs them badly

Weather Derivative is a rather new, but a very important hedging instrument for India. A successful or a failed Monsoon can change not only the economics of the best companies, but on an aggregated basis affects the whole nation.

There are as many people praying for a good monsoon as there people praying that the Sensex crosses 21,000. After all, it seems that India thrices (or rather survives) on those four months of water shed.

Benchmarking - An effective form of risk management

Not all risk management efforts need to be innovative or resource consuming. Benchmarking Business Analytics with peer group companies can also yield valuable risk management benefits.

Take for example lending patterns, loss provisions, NPA and credit concentration. By closely tracking these parameters to industry benchmarks and also to any standard or expected dataset, a company is able to steer away from building a risky business book.

Summary of Voluntary Corporate Governance Guidelines (Dec 2009) issued by MCA

Attached is the summary of very important, but voluntary guidelines on Corporate Governance issued by the Ministry of Corporate Affairs. These are currently voluntary in nature, but given the strong focus on corporate Governance, there is likely going to be a strong push to include most of these in the new Acts and Mandatory Guidelines.

Just a few days back there was a move to separate the offices of the Chairman and the ED.

Turning Risk to Advantage

This commercial from KPMG captures the essence of Risk Management. Taking Risks throughout the day, but only to the extent that your risk appetite allows you to. (The last shot in the commercial, where the couple decide not to jump down the building given the huge fall, shows that not all risks need to be undertaken).

But throughout the commercial, the duo are jumping and running around all objects, all of which is within their appetite.

I think the commerical is well made and brings across a strong message.

Role of a CRO

So, what exactly is the role of a seemingly new role that has been created in the organisation. Riskpro LLP helps you to decode the vast discussions and global best practices and summarises as follows.

1. The CRO (together with his team) is the guardian of risk management in a company or organisation.

2. CRO should be positioned as a CHIEF at the top level of the organisation

3. CRO should be responsible for specific risk management aspects, separate from the responsibilities of the CEO

Corporate Governance and the tone at the Top

Corporate Governance ideally should starts at the top and may or may not end at the top. In this article, we view four key messages of how the tone at the top helps to shape up strong corporate governance. These were highlighted by Mr. Neville Dumasia from KPMG India.

Corporate Governance_ The 10 Commandments

In a session conducted by CII today, Mr. J.J. Irani – Director – Tata Sons highlighted 10 essential elements (reworded and summarized by the author) that will helps companies to institutionalize a strong corporate governance culture that not only benefits the company, but all the stakeholders at large. For clarifications on any of these elements, you may reach out to manoj.jain@riskpro.in who will help with the necessary clarification.

Coporate Governance and Investor Protection

Corporate Governance and Investor Protection go hand in hand. In a session conducted by CII today, the focus of the seminar was purely on how corporate governance enhances investor confidence, increases investor participation in capital market and results in overall health of the Indian economy.

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