In this podcast Jack Perkins of the Financial Times interviews, BearingPoint managing director, Brian Hart during the Financial Times Data Management and Use Editorial Breakfast. During the interview Brian addresses the economic turmoil and the lessons risk executives can take from recent activities. Brian outlines recommendations for executives on how they can manage the economic downturn and addresses the need for a cultural overhaul. Finally the podcast reviews regulators and their responsibilities to the market while outlining some factors for future success.
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Tagged Brian Hart, compensation, data management, finance, financial markets, Financial Times, governance, Jack Perkins, regulations, risk, risk management, transparency
Join BearingPoint Managing Director, Brian Hart, as he explores the importance of an adequate risk and performance platform and how it can help companies deal with the credit crisis. Given the scope, depth, and length of this crisis, our clients are clearly being forced to re-examine how they conduct business. The issues that we see are the most prevalent are the need to access capital, how to fund a balance sheet, earnings, acquisitions and dispositions, government intervention, and most importantly- the speculation around change. When an organization deals with these issues on a day-to-day basis, like we see happening now, we know we’ve entered crisis mode. This has many companies wondering what went wrong and how can we better equip ourselves for the future?
The single most important thing that needs to be addressed is the realization of how much capital is being used at a given time. Most people don’t realize how much capital they’re using because of their lack of transparency, and when they finally realize it, it’s too late. To come out of this, we’re asking people to watch very closely how much capital they are spending and to cut any unnecessary costs. This can be done by acknowledging the need for better data management and risk capabilities. BearingPoint has addressed this with a seven point analytical strategy that can assist clients with understanding what changes they need to make. In the podcast, you will hear important points, such as how to manage data, estimate risk, change current business processes and how to implement an integrated risk and performance framework.
Clearly this crisis has exposed a number of weaknesses in risk management across the sector. Most organizations still have basic issues around risk and transparency. This podcast addresses key areas that are lacking in the risk management sector; such as understanding your risks, what risks are making you money and how effectively your trading machine is working? There are many changes that need to be made across the entire financial services sector, and the key points that are addressed in the podcast can help you itemize an action plan to take the appropriate measures to ensure future success.
Join BearingPoint Senior Business Advisor, Larry Taylor, as he explores some of the risk strategies that can assist with market survival. With all the turmoil in the financial services space in recent weeks, it’s important to know how the industry got in to this ‘mess’ to prevent future occurrences. In this podcast, we discuss the fundamental changes that every company needs to make, as well as steps to go about implementing.
The major change all companies need to make is to dispose of non-working assets. If an asset hasn’t been profitable in over a year, it’s time to move on. Another change that is focused on is the need for regulatory compliance. Each and every organization needs to emphasize regulatory requirements efficiently. Lastly, you need to “shrink smart” and manage risk management in an appropriate fashion.
Throughout this podcast you will learn the “right” way to cut expenses and how to keep the regulators happy. We also found that there are many financial institutions that have remained successful despite the recent downturn. Tune in to learn the secret to their success and ways to bring their strategies into your own environment.
Take a look at this article on Risk Management published in Financier Worldwide’s Strategies for Successful Public Companies in May 2008 written by BearingPoint’s Tony Klimas.
Compliance and regulatory costs can be a significant burden on global businesses. Some of these costs, such as environmental regulation and financial statement compliance are well documented while others, the cost of managing potential product liability for example, are less visible but significant.
Risk management business disciplines have become increasingly sophisticated and in many companies, the risk management function is a standalone business function under the responsibility of a senior executive. One key benefit of effective risk management can be an overall reduction in compliance and regulatory costs.
In this article, Tony specifically addresses the most recent audit standard developed as part of the Sarbanes-Oxley legislation, Audit Standard No. 5 (AS5). Tony explains how AS5 can help reduce the costs of compliance and explains the key changes that are incorporated into AS5 as compared to previous audit standards such as AS2.
About Tony Klimas
Tony is a Managing Director in BearingPoint’s Risk Management practice. He is based out of our Atlanta office.
Join BearingPoint senior manager Larry Taylor as he explores the importance of managing reputational risk. Reputational risk measures the change in perception of a company. A prime example is the recent credit crisis. Even companies that were not directly affected by it, but had “credit” in their business description, were quickly identified as a threat. Many vendors stopped their association with them and clients ran to competitors for guidance. Now more than ever, it’s extremely important to safeguard a company’s reputation. The reputation is currently serving as the sole source of economic value of a firm.
In a situation where the reputation being portrayed is incorrect, a company must have the ability to quickly respond to such criticism, prior to any real damage being done. The key to preventing such a travesty is to understand the sources of your risk and determine what the potential impacts would be. There are also many ways to determine how a company is currently perceived, such as its stock price, customer acquisition and customer patterns. These are clear indications of your favorability and a clear indicator if changes need to be made.
Key executives need to know how their company is being displayed in the marketplace and how they are being evaluated through a stakeholder prism. Many times, a company is not aware of its perception in the marketplace until it’s too late. With all the new technology available, it’s easier than ever to monitor your company’s reputation. It’s the responsibility of the executives to have a clear message relayed to their employees so that everyone assembles under one culture. It is only then that people will band together to ensure the company’s perception remains positive and “outs” anyone who strays from what has been clearly outlined as the company’s standards.
The global trade environment is complex—and steadily growing more so. International customs organizations and other regulatory bodies that govern international trade are becoming more adept at using technology to collaborate on and detect noncompliance with regulations and laws. Other factors, most notably terrorism, have added to organizations’ compliance burdens.
These burdens are not easily avoidable as organizations are beginning to realize that global trade is a critical part of their supply chains. Whether they ship products internationally, source raw materials from low-cost countries or set up operations in emerging markets to supply goods locally, today’s global businesses must find ways to cope with the many challenges of moving goods across international borders.
This paper explores new thinking around how to develop a global trade management strategy to seize the opportunities created by globalization while mitigating the risks.
With the recent market turmoil, the question has been raised: “Are traditional risk mitigation systems inadequate in times of crisis?”
Here are some steps organizations should consider to address risk management:
1. Push analytics to the limit. How you measure risk impacts how you address it.
2. Be strategic. Drive a comprehensive data strategy.
3. Examine your business processes. Change them if necessary.
4. Put better information and tools in the hands of deal makers. Empower CEOs with information on the risk environment.
5. Pursue capital arbitrage and compliance opportunities.
6. Jump start the incentive structure. Mobilize your workforce and address the human factor.
7. Implement a comprehensive, integrated performance and risk management framework.
This new thinking on risk management is explained in more detail in this paper. Find out what helps organizations address these issues and position themselves to deliver superior results.