Strategy, uncertainty, risk & analysis
Corporate businesses now face the same requirement to understand the relationship between risk and capital that apply to financial firms.
Meanwhile, many financial firms are still struggling to implement efficiently requirements for analysis of risk and to use the results to improve decision-making.
reviewing your longer-term viability statement
and integration of strategy, risk and analysis
In September 2014, the UK corporate reporting regulator, the Financial Reporting Council, promulgated a new corporate reporting requirement: the longer-term viability statement. The new statement was required for any reporting for periods from October 2014. Along with the requirement came new FRC Guidance on risk management and internal control. That document changed – or should have changed – the way corporate businesses in the UK think about risk and uncertainty.
Reviews for the FRC suggest few business are making the most of this new, vital business risk tool. We can review your statement using a real-time risk decision tool to evaluate your viability statement as well as review your process to ensure your board and executives are making the most of the insights the process generates. And we can do in in two weeks.
To find out more, view online or download our document:
. . . in which we describe Evaluating your longer-term viability statement process, its results, efficacy, reliability and utility.
At last: risk analysis that makes sense!
After many years of advocating it, we are delighted that regulators both within and outside financial services sectors are finally moving to an approach to risk that makes sense.
For financial services firms
In financial services, operational risk – the importance of which was underscored by any sensible analysis of the global financial crisis – has emerged from analytic shadows. Finally, regulators have cast off the old audit-based blinkers of risk and have understood that what matters is what might happen, the probability of its occurrence, the impact if it happens and any loss associated with impact, the effectiveness of controls, mitigations and transfer arrangements and the capital the business requires to offset those risks to a certain level of risk tolerance. Finally, an approach that recognises that you cannot add amber and red!
We assist financial services firms to enhance their governance of risk across classes and across their enterprise and to deepen their understanding of their operational risks, how to analyse them meaningfully and what to do with that knowledge – how to make it useful. To find out more:
For non-financial corporate firms
Outside financial services, the 2014 Guidance by the UK's Financial Reporting Council on risk management, internal control and related financial and business reporting shines a torch on the real meaning of risk in a corporate entity. Finally, regulators get it (with more than a little help from us, we are keen to point out). At Appendix B (see page 19), t he FRC's guidance contains an approach to corporate analysis of risk that, finally, makes sense.
Of course, what you do with that approach makes the real difference in the utility of your risk management efforts. We assist corporate firms to develop or review their approach to preparing a longer-term viability statement and how to use it. This is the first step in a more rigorous and worthwhile approach to management of risk that actually improves the business and makes sense. To find out more . . .