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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

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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. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-6204

Keywords

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Abstract

Details

Financial Derivatives: A Blessing or a Curse?
Type: Book
ISBN: 978-1-78973-245-0

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Article
Publication date: 24 December 2020

Isaac Akomea-Frimpong, Xiaohua Jin and Robert Osei-Kyei

Globally, the management of financial risks has gained much attention in the public–private partnerships (PPP) market in recent years. Existing studies rank financial risks

Abstract

Purpose

Globally, the management of financial risks has gained much attention in the public–private partnerships (PPP) market in recent years. Existing studies rank financial risks among the topmost risk factors that determine the success or failure of a PPP project. As essential for managing financial risks, a systematic review of previous studies on financial risk management of PPP from 1995 to 2019 (inclusive of both years) has been presented in this paper.

Design/methodology/approach

The paper undertakes a systematic analysis of 49 relevant and available studies on financial risk management of PPP projects.

Findings

From the results, high-interest charges, increased construction costs and increased market risks are some of the key financial risks hampering the success of PPP projects. Techniques used to assess financial risks include Monte Carlo Simulation (MCS) and Net Present Value (NPV). Financial risks control adopted by project managers include minimum revenue guarantee and real option pricing. Extremely limited studies on financial risk management in PPP projects in developing economies was revealed.

Practical implications

Project managers in developing financial risk management models may use the outcome of this paper to improve the financial success of PPP projects. Holistically, researchers will be guided to investigate and heighten the pertinent issues on financial risk management of PPP projects in academia.

Originality/value

The results provide a rare guide to project managers in controlling financial risks of PPP projects which is an unexplored topic. It is also the first paper to highlight the issues of financial risk management in PPP projects research.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

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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…

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.

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Article
Publication date: 26 July 2011

Siti Zaleha Abdul Rasid, Abdul Rahim Abdul Rahman and Wan Khairuzzaman Wan Ismail

The purpose of this paper is to examine the link between management accounting and risk management. The paper measures the extent to which management accounting practices…

Abstract

Purpose

The purpose of this paper is to examine the link between management accounting and risk management. The paper measures the extent to which management accounting practices help in managing risks and the extent of the integration between these two important managerial functions.

Design/methodology/approach

The study used a mail survey of financial institutions listed in the Malaysian Central Banks' web site. The respondents to whom 106 questionnaires were sent were the chief financial officers; the response rate was 68 percent. A total of 16 post‐survey semi‐structured interviews were also conducted with selected respondents to gain further insights into the survey findings.

Findings

The findings from the survey indicate that analysis of financial statements was perceived to contribute most towards risk management. The majority of the respondents were of the view that the management accounting function was greatly involved in the organization's risk management. Consistent with the survey findings, the interviewees also perceived that budgetary control, budgeting, and strategic planning played important roles in managing risk.

Research limitations/implications

This is a study conducted in Malaysian financial institutions and thus, results may not be generalizable to other contexts. The findings of this study strengthen the importance of both management accounting and risk management in complementing each other to form part of the corporate performance management systems.

Originality/value

This paper contributes to the literature as very few studies have examined the significant link between management accounting and risk management.

Details

Managerial Auditing Journal, vol. 26 no. 7
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 4 November 2013

Ahmad Raza Bilal, Noraini Bt. Abu Talib and Mohd Noor Azli Ali Khan

The main purpose of this study is to investigate the remodeling of risk management, risk-averse mechanism and the importance of Basel-III framework to cope with the…

Abstract

Purpose

The main purpose of this study is to investigate the remodeling of risk management, risk-averse mechanism and the importance of Basel-III framework to cope with the current financial challenges in the regime of post global financial crises of 2008-2011 by evidences in the banking sectors of emerging economies of Bahrain, the UAE and Pakistan.

Design/methodology/approach

To ensure deep understanding in this cross-cultural study, two fold data collection techniques are used; one through distribution of questionnaires to relevant staff members and second through personal interviews of selected risk officials. Respondents are selected on the basis of minimum five years banking experience and relevant professional education of finance or risk management. Multistage sampling technique is used for data collection. To ensure the consistency from respondents, personal interviews were conducted with an interval of six months after receipt of questionnaires. Various statistical and econometric techniques were used to test the study hypotheses and to satisfy the study objectives.

Findings

Based on statistical analysis and personal surveys, research findings concluded that banking sectors of study-countries have deep concern with potential risk challenges and they are in continuous process to improve risk measurement framework in accordance with the latest regulatory obligations. All three types of banks have clear understanding of RM practices and strong relationship is observed between predictors and endogenous variables. Respondent banks of study-countries have deep attentiveness to manage all key risks and they recommend to transform existing regulatory framework including Basel-III reforms to develop a more comprehensive “one-size-fits-all” regulatory framework to cover loopholes of existing financial system.

Research limitations/implications

This study is limited to the findings of remodeling of risk management to cope with the new financial challenges for the banking sector. Empirical investigation is conducted in emerging economies of the sub-continent and gulf and evidences are obtained from the UAE, Bahrain and Pakistan. Following this research model, future research can be extended to enlarge the sample size, by including other regional countries or a comparison between eastern and western countries to make it more useful to understand the risk management strategies, minimize banking default risks and to make this significant economic sector more strengthen.

Practical implications

Respondent countries of this study are fast growing and emerging economies of the sub-continent and gulf. Results of this cross-cultural study are likely to be beneficial for credit analysts, bankers and academic researchers. Findings are also beneficial for local and international business investors while they are taking prudent investment decisions in respective capital markets.

Originality/value

This is the first comparative study to empirically investigate the RM practices and risk-averse mechanism in banking sectors of Bahrain, the UAE and Pakistan. In perspective of study-countries, a critical analysis on risk-averse mechanism and Basel-III regulatory implications is demonstrated in this study.

Details

The Journal of Risk Finance, vol. 14 no. 5
Type: Research Article
ISSN: 1526-5943

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Article
Publication date: 23 October 2009

Torben Juul Andersen

The purpose of this paper is to argue that strategic responsiveness is of paramount importance for effective risk management outcomes and to introduce an empirical study…

Abstract

Purpose

The purpose of this paper is to argue that strategic responsiveness is of paramount importance for effective risk management outcomes and to introduce an empirical study to demonstrate this.

Design/methodology/approach

Real options logic is adopted to explain how effective risk management capabilities improve performance and how innovation and financial slack enhance this effect. The propositions are examined across 896 companies using two‐stage least square regressions.

Findings

The study reveals that risk management effectiveness combines both the ability to exploit opportunities and avoid adverse economic impacts, and has a significant positive relationship to performance. This effect is moderated favorably by investment in innovation and lower financial leverage.

Research limitations/implications

The analysis is based on a sample of large firms, which may affect the generalizability of results. Nonetheless, the study shows that effective risk management capabilities differentiate the firms and determine success and failure. It further underscores the importance of combined innovation policy and capital structure decisions as firms deal effectively with risk and uncertainty.

Practical implications

The findings indicate that corporate management must consider commitments for innovation and financial slack to enhance positive risk management effects. This result is in dire contrast to traditional beliefs that tighter resource management and higher financial leverage lead to better economies.

Originality/value

This is one of few studies to explicitly consider strategic responsiveness as instrumental for effective risk management outcomes while investigating the economic effects associated with the ability to combine generation of upside gains and downside loss avoidance.

Details

Journal of Strategy and Management, vol. 2 no. 4
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 1 February 1993

Richard Dobbins

Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that…

Abstract

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

Details

Management Decision, vol. 31 no. 2
Type: Research Article
ISSN: 0025-1747

Keywords

Content available
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…

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

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