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Book part
Publication date: 17 September 2014

Anson Wong

Emphasising the significance of managing environmental and social issues for businesses, the chapter aims at highlighting the need of developing a non-financial risk

Abstract

Purpose

Emphasising the significance of managing environmental and social issues for businesses, the chapter aims at highlighting the need of developing a non-financial risk management system for elevating corporate social responsibility (CSR) performance in China. Particularly, through discussing its importance, opportunities, and challenges.

Design and approach

Analysis and discussion of the chapter are based on multiple sources of information. Review of literature includes authoritative academic articles, reports from renowned global organisations, media coverage of corporations, and examples of business cases in China.

Findings

Several key findings are covered in the chapter. First of all, environmental and social concerns are usually being deemed as intangible issues that need to be properly articulated and managed by an effective non-financial risk management system for enhancing corporate sustainability in China. Secondly, through different interpretations of sustainability, links could be drawn for non-financial risk management and sustainability. Thirdly, by explaining the impacts from non-financial risk management to sustainable development and profits, the chapter has argued CSR as a clear business case for any company in China. Fourthly, challenges are also portrayed for the effective management of non-financial risk management by corporations. Finally, the need of a well-defined non-financial risk management system for helping businesses to be more competitive, thus, moving closer to sustainability in China and elsewhere is provided.

Social implications

Integrating environmental and social risks is critical to the effective management of any corporation’s real risks and to improve resource allocation in a sustainable fashion. This demands a systematic and strategic identification of issues through non-financial risk management. Most significantly, this chapter has shown the way this can be achieved by any corporation in China, and the concepts can be applied into other societies.

Originality/value

The contribution of the chapter is thought to be significant. Although there exists a wide body of research on sustainable development, risk management and CSR in China, there is limited insight into how corporations can effectively conceptualise such intangible or non-financial risks in relation to sustainability.

Details

Corporate Social Responsibility and Sustainability: Emerging Trends in Developing Economies
Type: Book
ISBN: 978-1-78441-152-7

Keywords

Content available
Article
Publication date: 14 May 2021

Lan Thi Mai Nguyen and Phi Hoang Dinh

The authors investigate whether firms can ensure their financial stability during the coronavirus disease 2019 (COVID-19) pandemic by having ex-ante risk management.

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Abstract

Purpose

The authors investigate whether firms can ensure their financial stability during the coronavirus disease 2019 (COVID-19) pandemic by having ex-ante risk management.

Design/methodology/approach

The authors study 279 Vietnamese listed firms by investigating their disclosure of risk awareness and risk management tool(s) in the 2019 annual reports. The authors then examine whether prior risk awareness and adoption of risk management tool(s) can enhance the firms' financial ratios during the COVID-19 pandemic.

Findings

The authors find that firms that disclose their risk management tool(s) in the 2019 annual reports have better asset utilization and higher liquidity during the COVID-19 pandemic than the others. However, firms that simply express their risk awareness exert no stronger financial stability. In addition, the authors document that debt management is the most popular and most effective tool to ensure firms' financial stability during the crisis.

Originality/value

The study highlights the need for ex-ante risk management for future pandemics. The authors also suggest that stakeholders can rely on the degree of risk management tool utilization to evaluate the financial stability of firms.

Details

China Finance Review International, vol. 11 no. 3
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 27 January 2021

Benard Alkali Soepding, John C. Munene and Dagwom Yohanna Dang

The purpose of this paper is to investigate the financial well-being of often-neglected group in the society. The authors examined the role of risk management and social…

Abstract

Purpose

The purpose of this paper is to investigate the financial well-being of often-neglected group in the society. The authors examined the role of risk management and social capital in the financial well-being of the retirees in Nigeria.

Design/methodology/approach

A quantitative method of research is used with a six-point Likert scale questionnaire. A survey was conducted to 376 retirees from public organizations to determine the perception of their financial well-being in post-retirement era. The sample population is selected using the simple random sampling technique. An exploratory factor analysis, confirmatory factor analysis and structural equation modeling are used to analyze the data.

Findings

The results indicate that both risk management and social capital are significant predictors of retirees’ financial well-being in the Nigeria context. All respondents have a good education background.

Research limitations/implications

This study focused on retirees who have worked in public organizations in Nigeria. Thus, it is likely that the results may not be generalized to other settings. The results show that to promote financial well-being among retirees, the focus should be put mainly on individual risk management and maintaining good social capital.

Originality/value

The present study is first of its kind that focuses on contributory role of risk management and social capital in influencing the financial well-being of retirees in Nigeria. Findings make a novel contribution to retirees’ financial well-being literature by clarifying the significant role played by risk management and social capital in promoting the financial well-being of retirees in a developing country, specifically in Nigeria.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 16 no. 2
Type: Research Article
ISSN: 1750-6204

Keywords

Article
Publication date: 29 July 2014

Anson Wong

This paper aims at highlighting the significance in developing non-financial risk management, emphasizing the need of managing environmental and social issues for…

3523

Abstract

Purpose

This paper aims at highlighting the significance in developing non-financial risk management, emphasizing the need of managing environmental and social issues for enhancing corporate sustainability. Particularly, through discussing the implications of non-financial risk management, its benefits, opportunities and challenges will also be presented.

Design/methodology/approach

Drawing on authoritative academic literature, reports of corporations’ studies, current articles and documents, the researcher has managed to examine and construe the development and implications of non-financial risk management.

Findings

Several key findings are covered in this article. First of all, environmental and social concerns are usually being deemed as intangible issues that need to be properly articulated and managed by an effective non-financial risk management system for enhancing corporate sustainability. Second, through different interpretations of sustainability, links could be drawn for highlighting the significance of non-financial risk management and corporate sustainability. Third, by explaining the impacts from non-financial risk management to sustainable development and profits, the article has illustrated corporate sustainability as a clear business case for any corporation. Fourth, challenges are also portrayed for the effective management of non-financial risk management by corporations. Finally, and most importantly, the need of a systematic and strategic non-financial risk management system for helping businesses to be more competitive, thus, moving closer to sustainable development, is discussed in this paper.

Originality/value

The contribution of the article is thought to be significant. Although there exists a wide body of research on sustainable development, risk management and corporate sustainability, there is limited insight into how the corporations can effectively conceptualize such intangible or non-financial risk in relation to sustainability. Integrating environmental and social risks is critical to the effective management of any corporation’s real risks, and to improve resources allocation in a sustainable fashion. This demands a systematic and strategic identification of issues through non-financial risk management. Most significantly, this article has shown the way this can be achieved by any corporation, and the concepts can be applied globally.

Open Access
Article
Publication date: 26 June 2019

Thomas Michael Brunner-Kirchmair and Melanie Wiener

Inspired by new findings on and perceptions of risk governance, such as the necessity of taking a broader perspective in coping with risks in companies and working…

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Abstract

Purpose

Inspired by new findings on and perceptions of risk governance, such as the necessity of taking a broader perspective in coping with risks in companies and working together in interactive groups with various stakeholders to deal with complex risks in the modern world, the purpose of this paper is looking for new ways to deal with financial risks. Current methods dealing with those risks are confronted with the problems of being primarily based on past data and experience, neglecting the need for objectivity, focusing on the short-term future and disregarding the interconnectedness of different financial risk categories.

Design/methodology/approach

A literature review of risk governance, financial risk management and open foresight was executed to conceptualize solutions to the mentioned-above problems.

Findings

Collaborative financial risk assessment (CFRA) is a promising approach in financial risk governance with respect to overcoming said problems. It is a method of risk identification and assessment, which combines aspects of “open foresight” and the financial risk management and governance literature. CFRA is characterized as bringing together members of different companies in trying to detect weak signals and trends to gain knowledge about the future, which helps companies to reduce financial risks and increase the chance of gaining economic value. By overcoming organizational boundaries, individual companies may gain the knowledge they would probably not have without CFRA and achieve a competitive advantage.

Research limitations/implications

A conceptual paper like the one at hand wants empirical proof. Therefore, the authors developed a research agenda in the form of five propositions for further research.

Originality/value

This paper discusses the existing problems of financial risk identification and assessment methods. It contributes to the existing literature by proposing CFRA as a solution to those problems and adding a new perspective to financial risk governance.

Details

The Journal of Risk Finance, vol. 20 no. 3
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 1 April 2006

John Holland

This paper aims to explore how fund managers (FMs) deal with major problems of ignorance and uncertainty in stock selection and in asset allocation decisions.

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Abstract

Purpose

This paper aims to explore how fund managers (FMs) deal with major problems of ignorance and uncertainty in stock selection and in asset allocation decisions.

Design/methodology/approach

Interviews were conducted with 40 fund managers in the period October 1997 to January 2000. A seven stage approach was adopted to sift through and process the large volumes of case data. The interview case data formed the basis for identifying common patterns and themes across the cases.

Findings

The case data revealed the nature of this private information agenda concerning intellectual capital or intangibles and the dynamic connections between these variables in the value creation process. The case data provided insight into how the book value and market value gap arose and the special role of information on intangibles and intellectual capital in valuing the company.

Practical implications

The fund management behaviour has important implications for regulatory policy issues on insider information, on corporate disclosure, the corporate governance role of financial institutions, and for the governance of financial institutions.

Originality/value

The paper focuses on issues of importance in an increasingly concentrated and global FM industry.

Details

Managerial Finance, vol. 32 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 3 June 2014

Frank Bezzina, Simon Grima and Josephine Mamo

The purpose of this paper is to bring to light the risk management practices adopted by financial firms in the small island state of Malta. It seeks to: first, identify…

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Abstract

Purpose

The purpose of this paper is to bring to light the risk management practices adopted by financial firms in the small island state of Malta. It seeks to: first, identify the risk management strategies and mechanisms that these firms adopt to manage risks, maximise opportunities, and maintain financial stability; second, determine whether these practices are perceived as contributing to principled performance; third, examine the extent to which risk management capabilities offer competitive advantage to firms, and fourth, investigate whether corporate social responsibility (CSR) is a key driver of risk management corporate strategies.

Design/methodology/approach

A self-administered questionnaire purposely designed for the present study was distributed among the 156 credit institutions, investment firms and financial institutions registered with the Malta Financial Services Authority. Overall, 141 firms participated in the study (a response rate of 90.4 per cent) and the responses were subjected to statistical analysis in an attempt to answer four research questions.

Findings

Maltese financial firms have sound risk management practices that link positively with added value and principled performance. Although competitive advantage has been given less weight by these firms, the implemented risk management mechanisms allow for a strong risk culture, defined risk management goals, accountability and continual improvement. CSR forms part of the firms’ risk management corporate strategies and is valued as part of these firms’ corporate culture, while financial/economic factors are viewed as key in driving effective risk management principles.

Originality/value

The study provides empirical evidence that securing “best practice” in firms’ risk management corporate culture is seen as better predicated on maximising financial advantage (“the instrumental driver”) rather than simply reflecting externally imposed standards (“the compliance driver”).

Book part
Publication date: 12 November 2016

Artie W. Ng and Wallace Tang

This study explores the interrelationship between regulatory risks and strategic controls within the financial supervision architecture of an emergent global financial

Abstract

Purpose

This study explores the interrelationship between regulatory risks and strategic controls within the financial supervision architecture of an emergent global financial centre of China that embraces innovation as part of its strategic objectives.

Methodology/approach

This paper employs a longitudinal case study approach to examine the institutional dynamics of the key financial regulators in connection with the regulated financial institutions in Hong Kong before and after the financial tsunami of 2008.

Findings

First, this study reveals an organic development of a specialised financial regulatory architecture that resists transforming itself structurally despite the significant impact of externalities. Second, in this post-financial crisis analysis, regulated financial institutions swiftly respond by strengthening their risk controls through compliance with the guidelines imposed by the regulator. Institutional dynamics in influencing the implementation of risk controls through a top-down interactive mechanism are observed. Such dynamic and pertinent rapid responses induce the pursuit of optimal risk management within a regulatory framework.

Originality/value

This paper provides a longitudinal case study to reveal regulatory risks and strategic controls of the global financial centre of China. It unveils mitigating risk control measures in the aftermath of the global financial crisis. The study demonstrates how regulatory institutions strive to take precautionary, coercive measures such that the regulated institutions mimic and implement prudent mechanisms.

Details

The Political Economy of Chinese Finance
Type: Book
ISBN: 978-1-78560-957-2

Keywords

Book part
Publication date: 29 December 2016

Mahfod Aldoseri and Andrew C. Worthington

The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and

Abstract

The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and Shari’ah (Islamic law) compliance risk. We explore current risk management practices and establish the link between risk management and the financial performance of banks and the efficiency and effectiveness of financial sectors in emerging markets. Because of their distinctive risk profile, Islamic finance institutions face challenges in risk management. We show that Islamic banking is riskier in emerging markets because of the presence of immature money markets, limitations in the availability of lender of last resort facilities, and deficiencies in market infrastructure. There is also no evidence that Islamic banks have developed effective solutions for managing the risks conventional banks face as well as their own unique risks. We suggest that the countries that do this best are those that prioritize the structure of risk management knowledge and capabilities in a single financial regulator.

Article
Publication date: 8 February 2022

Kwame Owusu Kwateng, Christopher Amanor and Francis Kamewor Tetteh

This study aims to empirically investigate the relationship between enterprise risk management (ERM) and information technology (IT) security within the financial sector.

Abstract

Purpose

This study aims to empirically investigate the relationship between enterprise risk management (ERM) and information technology (IT) security within the financial sector.

Design/methodology/approach

Risk officers of financial institutions licensed by the Central Bank of Ghana constituted the sample frame. A structured questionnaire was used to elicit data from the respondents. The structural equation modeling method was employed to analyze the hypothesized model.

Findings

The results revealed that ERM has a strong positive substantial effect on IT security within financial institutions. However, organizational culture failed to moderate the relationship between ERM and IT security.

Practical implications

A well-managed risk helps to eliminate ineffective, archaic and redundant technology as the originator of rising perils and organizational concerns in today's corporate financial institutions since ERM established a substantially strong positive correlation among the variables.

Originality/value

ERM studies in the African context are rare. This paper adds to contemporary literature by providing a new perspective toward the understanding of the relationship between ERM and IT security, especially in the financial industry.

Details

Information & Computer Security, vol. 30 no. 3
Type: Research Article
ISSN: 2056-4961

Keywords

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