Financial enterprise risk management sweeting 2011

Running head: AKAWINI COPPER 1

AKAWINI COPPER 2

Transformation of risk management in Akawini Copper

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Transformation of risk management in Akawini Copper

Enterprise risk management remains to be one of complicated and imperfectly understood field of studies. As the ERM continues to evolve, there still exists gaps of knowledge on what it is and how it will be achieved in organizations. Akawini Copper is characterized by ineffective rudimentary risk management approaches that call for improvements. Some of the techniques that management of Akawini Copper should implement in promotion and monitoring of the transformation of their risk management in their business include. Proper identification of the risks. There should be an appropriate analysis of risk with clear distinctions between the plausible worse case consequences and the likelihood of occurrence of adverse events to avoid confusions (Hopkin & Management, 2012). There should be clear identification of critical controls which should be assigned to a specific individual to perform an ongoing monitoring and periodical reviews. The management team of Akawini Coppers should develop a coherent process through documentation of results of the available risk management practices to gain insights from the identified weaknesses. Insight on the failures or success of the adopted risk management strategies will be learned through the root cause analysis and determine the possible action for increasing effectiveness in cases of failures. Akawini management team should utilize a consistent application of the same methodology for risk analysis and in the evaluation of the control effectiveness.

The management also has to acknowledge the fact that risk management is an ongoing process and not a one-off event and therefore, should be frequently revised and not just reviewed at the end of the year (Lam, 2017). The risk management functions should be integrated into all critical decision making processes such as planning and strategic decision making. There should be one set of criteria for determining the significance of risks. All risks and their related data should be managed in a single database and not on personal computers, as was the case before.

References

Hopkin, P., & Management, I. O. (2012). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management. Kogan Page Publishers.

Lam, J. (2017). Implementing Enterprise Risk Management: From Methods to Applications. John Wiley & Sons.

Transforming Risk Management at Akawini Copper

This case study describes but the approach to managing risk is also remodelled and redoubled in a very company. The case study depends on a theoretic company, Akawini Copper, that has recently been inborn by a world concern, United Minerals. Akawini encompasses a rudimentary approach to risk management (RM) that possesses to be improved if the new householders are to understand the quantity of comeback claimed among the business case that was used to justify the acquisition. Akawini owns one mine and concentrate plant some fifty kilometres from the coast. It ships the concentrate practice trucks to a close-by port for export. The company earns revenue of $774 million a year from the sale of concentrate and employs an entire of 1,500 of us at the mine electronic computer and port (Chapman, 2011).

The Acquisition and Due Diligence

United Minerals has developed and implemented a framework for managing risk supported ISO 31000 (ISO 2009). Especially, this has enabled it to properly integrate the prospect management technique into its approach to making selections on major comes and investment decisions and to boot into the means that it develops, plans, and executes comes.

During due diligence before the acquisition, the prospect management team for United Minerals reviewed the current approach to risk management at Akawini and, from an off-the-cuff examination of documents, was able to verify that the approach was really restricted and was unlikely to yield voluminous real worth. The team found, as associate degree example, that:

• a technique for formal risk assessment was applied only to what were delineate as "business risks." This occurred simply the once a year as a neighbourhood of a risk review that updated the current risk register therefore it are often reportable to Associate in Nursing Audit Committee (Fraser, 2014).

• There was a special technique applied for safety risks that really didn't ponder risks as such but generated a risk rating using a matrix system only for hazards.

• No systematic technique for assessing and treating risks was utilized in support of major decisions. especially, project management didn't embody any type of specific risk management technique (Lam, 2014).

• The Akawini risk manager mainly proscribed insurance matters and asked the company's external audit provider to produce a facilitate for the annual risk review.

• The annual internal audit created didn't seem to be supported the outcomes of the possibility assessment and did not think about assuring many of the essential controls.

• The possibility criteria systems used for every "business risks" and "safety risks" coated only prejudices consequences and gave the impression to be supported five levels of consequences and consequence varieties that weren't associated in any purposeful suggests that with the company's objectives (Sweeting, 2017).

• Every system used the term probability to estimate probability and didn't take into consideration the frequency or come quantity for consequences.

• In every system, risks were analysed incorrectly by combining the chance of an occurrence with what was pictured as "the plausible worse-case consequences." This created many "extreme" risks, that were then being discounted by managers as implausible.

• Once risk registers were created on spreadsheets, they were unbroken on separate personal computers and were rarely thought of until resulting yearly review. Any risk treatment actions elect weren't followed up or closed out.

• Important controls weren't best-known and weren't assigned to folks for current observance and periodic review.

• There was no coherent technique that made public and captured learnings from successes and failures (Zsidisin, 2008).

The risk management team signalled its problems to the acquisition team, and also, they'd like for improvement of Akawini Copper's approach to risk management to bring it into line with ISO 31000:2009. Then, the United Minerals framework was placed on the transformation created and given a high priority.

References

Chapman, R. J. (2011). Simple tools and techniques for enterprise risk management (Vol. 553). John Wiley & Sons.

Fraser, J., Simkins, B., & Narvaez, K. (2014). Implementing enterprise risk management: Case studies and best practices. John Wiley & Sons.

Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.

Sweeting, P. (2017). Financial enterprise risk management. Cambridge University Press.

Zsidisin, G. A., & Ritchie, B. (Eds.). (2008). Supply chain risk: a handbook of assessment, management, and performance(Vol. 124). Springer Science & Business Media.

18 hours ago

Ramakrishna Amula

Week 5 Discussion

COLLAPSE

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Hi All,

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Thanks,

Rama

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Running head: AKAWINI

COPPER

1

T

ransformation of risk management

in Akawini

Copper

Student’s

name

:

Institution

:

Date

:

Running head: AKAWINI COPPER 1

Transformation of risk management in Akawini Copper

Student’s name:

Institution:

Date: