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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 together in…

4505

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

Open Access
Article
Publication date: 20 March 2024

Marziana Madah Marzuki, Wan Zurina Nik Abdul Majid, Hatinah Abu Bakar, Effiezal Aswadi Abdul Wahab and Zuraidah Mohd Sanusi

This paper investigates the relationship between risk management practices and potential fraudulent financial reporting in Malaysia by considering recent regulatory reforms of the…

Abstract

Purpose

This paper investigates the relationship between risk management practices and potential fraudulent financial reporting in Malaysia by considering recent regulatory reforms of the Malaysian government on risk management practices.

Design/methodology/approach

The sample of this study was based on 257 firm-year observations during the 2012–2017 period. This study employed panel-least square regressions with period fixed effects.

Findings

This study found a significant association between risk management activities in the disclosure and potential fraudulent financial reporting. Nevertheless, this study found there is insignificant effect of the risk-management committee in reducing potential of fraudulent financial reporting.

Originality/value

This study is a pioneer research that relates firms’ risk management practices with potential fraudulent financial reporting measured by F-score. Thus, this study provides an insight to regulators on the extent of risk-management practices in deterring potential fraudulent financial reporting which can be used as an input for greater enforcement of risk-management regulations.

Details

Asian Journal of Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2459-9700

Keywords

Open Access
Article
Publication date: 23 November 2020

Peng Xie, Qiang Chen, Ping Qu, Jianping Fan and Zhijun Tang

This paper aims to systematically expound the theory and development background of supply chain finance and blockchain, design a railway freight supply chain financial platform…

3518

Abstract

Purpose

This paper aims to systematically expound the theory and development background of supply chain finance and blockchain, design a railway freight supply chain financial platform based on blockchain, determine the risk management system and business support system of supply chain finance business and analyze the value generated by the combination of supply chain finance business and blockchain.

Design/methodology/approach

Investigation and research method; Prototype method; Model method; Value analysis.

Findings

The business model integrating supply chain finance and blockchain technology will bring great changes to freight industry. The development of supply chain finance is beneficial to the healthy development of the core participants of railway freight transport business and its upstream and downstream ecosystems. It links commerce, logistics, warehousing and financial services together and builds an industry-integrated ecological service platform through information technology platform and supporting system, taking data as the basis and combining information technology such as blockchain as innovative means.

Originality/value

This paper will provide important reference value for related research. This paper innovatively designs the supply chain financial platform of freight transportation industry-integrating blockchain technology and analyzes its business model, technical system, risk management and control system and value system in detail, which will provide technical support for the innovative reform of freight information technology and realize the stable and high-speed development of freight logistics informationization.

Details

Smart and Resilient Transportation, vol. 2 no. 2
Type: Research Article
ISSN: 2632-0487

Keywords

Open Access
Article
Publication date: 10 February 2022

Graça Azevedo, Jonas Oliveira, Luiza Sousa and Maria Fátima Ribeiro Borges

The purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.

1187

Abstract

Purpose

The purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.

Design/methodology/approach

The paper conducts a content analysis of the risk and risk management sections included in the management reports and the notes of the annual reports of Portuguese commercial banks, for the years 2007, 2010 and 2013.

Findings

Findings show that theoretical frameworks underpinned in agency and legitimacy theories continue to provide valid explanations for risk reporting by Portuguese banks. More specifically, findings indicate that agency costs, public visibility and reputation are crucial drivers of risk reporting. Findings also indicate that younger banks with lower risk management skills use risk reporting either as an informational process or as a channel to manage organizational legitimacy.

Research limitations/implications

The content analysis does not allow readily for in-depth qualitative inquiry. The coding instrument is subject to coder bias. Information about risk can be provided in sources other than annual reports. Additionally, not all banks disclose information on corporate governance-related variables that could also influence risk reporting.

Originality/value

The current research setting has never been studied hitherto. In this sense, this study seems to be of great relevance given the scarcity of literature on the subject in Portugal.

Details

Asian Review of Accounting, vol. 30 no. 2
Type: Research Article
ISSN: 1321-7348

Keywords

Open Access
Article
Publication date: 24 March 2020

Robby Soetanto, Ferry Hermawan, Alistair Milne, Jati Utomo Dwi Hatmoko, Sholihin As'ad and Chusu He

Recent years saw a paradigm shift from ex post (reactive) to ex ante (proactive) approaches (e.g. insurance) to disaster risk financing for building resilience of communities in…

2766

Abstract

Purpose

Recent years saw a paradigm shift from ex post (reactive) to ex ante (proactive) approaches (e.g. insurance) to disaster risk financing for building resilience of communities in developing countries. To facilitate adoption, the approaches should be adapted so that they can be technically feasible and culturally desirable to the local context. This paper aims to report an exploratory study to elaborate the existing arrangements to deal with the impacts of disaster and the potential to shift to a more proactive disaster risk financing in Indonesia.

Design/methodology/approach

A series of stakeholder engagement activities in Semarang and Solo, Indonesia was conducted to ascertain the existing arrangements for disaster risk financing at local government level, the challenges/barriers to the adoption of insurance, education and policies to facilitate the transformation from reactive to proactive process. Thematic analysis was applied to transcribed conversations during interviews, focus groups and workshops. Identification of emerging issues/themes was also guided by the researchers’ notes during the events, and facilitated by qualitative analysis software, Atlas Ti®. This was complemented by an analysis of regulations and documents provided by the local stakeholders.

Findings

The local governments heavily rely on contingency fund, which is not enough and often significantly delayed to fund recovery and reconstruction of public infrastructure. The use of insurance is limited in both public and private sectors, particularly in the majority of low-income communities. Various barriers and challenges were identified under several categories, namely, institutional, cultural, affordability, lack of awareness and knowledge, insurance arrangement process and lack of trust. The findings also suggest that improving insurance education should involve multiple stakeholders, and both formal and informal routes should be pursued.

Originality/value

The research fills the gap of knowledge in disaster risk financing in the context of developing countries, specifically in local governments and communities in Indonesia. The findings may be replicable for other developing countries with low adoption of ex ante financial instruments for dealing with the impacts of disaster.

Details

International Journal of Disaster Resilience in the Built Environment, vol. 11 no. 3
Type: Research Article
ISSN: 1759-5908

Keywords

Open Access
Article
Publication date: 17 August 2021

Louai Ghazieh and Nadia Chebana

The purpose of this paper is to study the effectiveness of the risk management system in the European context, especially with regard to the risk management committee, the…

8493

Abstract

Purpose

The purpose of this paper is to study the effectiveness of the risk management system in the European context, especially with regard to the risk management committee, the uncertainty of the environment and company performance. In summary, it evaluates European companies listed on the stock exchange in France, Germany and the United Kingdom to determine how risk management systems influence financial companies' performance.

Design/methodology/approach

To study the effectiveness of risk management systems and their influence on performance, the large companies selected in our sample are fairly representative of the European market, according to the Dutch indices of each country (SBF 120 in France, HDAX 110 in Germany and FTSE 100 in United Kingdom).The empirical evidence is based on an international quantitative analysis, using a data set involving 320 companies listed on the stock exchange over a ten-year period from 2005 to 2014.

Findings

The results indicate that the establishment of a risk management and control system by a company positively influences its management, and its performance level and value creation also improve. The results of this study demonstrate a significant strengthening of the role of the risk management committee in the three countries. The surveillance function is reinforced, and in particular, the internal control system is accentuated.

Research limitations/implications

This study has some limitations that can form leads for future research. One of these limitations is the sample size. The authors have represented the European context by three countries that certainly constitute great European powers, but have regulations different from other countries. The company size is also a possible research element. Indeed, risk management system varies between large, small and medium-sized enterprises, so it is important to study each type of company well.

Originality/value

This study identifies the risk management committee as a mechanism of control that is highly important in the company, and it proposes an international framework that comparatively and empirically evaluates how the risk management system used in large European companies can improve their financial performance.

Details

Journal of Economics, Finance and Administrative Science, vol. 26 no. 52
Type: Research Article
ISSN: 2218-0648

Keywords

Open Access
Article
Publication date: 13 June 2023

Gabriel Castelblanco, Jose Guevara and Alberto De Marco

Global crises have become increasingly recurrent events that jeopardize public-private partnerships (PPPs). In this context, the purpose of this paper is to expose the PPP-crisis…

1412

Abstract

Purpose

Global crises have become increasingly recurrent events that jeopardize public-private partnerships (PPPs). In this context, the purpose of this paper is to expose the PPP-crisis research agenda by combining bibliometric and network analyses.

Design/methodology/approach

The PPP literature associated with global crises between the 2008 global financial crisis and 2022 was analyzed in three stages: (1) paper selection and screening for the inclusion/exclusion of articles relevant to this research, (2) semantic network development for examining thematic relationships among selected papers by considering the co-occurrence of keywords within the chosen studies and (3) calculation of network metrics for analysis.

Findings

The paper identified six research avenues for the PPP-crisis agenda: public interest, relational governance, risk management, user-pay PPPs, crisis management and financial performance. The PPP-crisis literature has spread significantly in the last five years driven by the case study approaches on a national or regional basis. Conversely, non-crisis periods generate room to strengthen user-pay PPPs and relational governance. The pandemic and post-pandemic times shared the priorities of the 2008 financial crisis but also strengthened the management of the risks and the structural drivers of the global crisis.

Originality/value

This study demonstrates that during global crisis periods, the public interest and financial performance gain relevance in a detriment of structural solutions to social legitimacy erosion of PPPs because of the urgency of giving tools to the public and private sectors to tackle the financial issues, which steer future issues for PPPs.

Details

Built Environment Project and Asset Management, vol. 14 no. 1
Type: Research Article
ISSN: 2044-124X

Keywords

Open Access
Article
Publication date: 31 March 2022

Rogério Serrasqueiro and Jonas Oliveira

The study aims to analyse annual reports of the non-financial European firms listed at the EURO STOXX 50 index over the period of 2007 and 2011.

1212

Abstract

Purpose

The study aims to analyse annual reports of the non-financial European firms listed at the EURO STOXX 50 index over the period of 2007 and 2011.

Design/methodology/approach

This study intends to address two main issues: to what extent the country-level institutional forces compel (directly) firm's risk reporting (RR) behaviour and in which way these country-level institutional forces moderate the relationship between RR and firm-level characteristics.

Findings

Main findings indicate that, during this period, the European listed companies disclosed more risk information on a voluntary basis (such as operational and strategic risks) and with better informative content (more forward-looking and focused on positive news). Consistent with institutional theory, findings confirm that the country-level institutional forces explain variations on RR. Additionally, it also indicates that the relationship between RR and leveraged firms is weaker among countries with stronger institutional forces. These findings have several implications for investors and regulators in Europe basically in helping achieve efficiency in investment decisions and to stimulate further efforts to improve RR regulations.

Originality/value

This study makes two major contributions. First, it extends Elshandidy's et al. (2015) work by using other country-level institutional forces that capture the efficacy of corporate boards, the protection of minority shareholders' interests, country's level of democracy, law enforcement mechanisms and press freedom. Second, it uses firms that are considered as a blue-chip representation of super-sector leaders in the Eurozone (but from different institutional contexts). This research setting can be more insightful in shedding some light towards our understanding on how these leading firms can promote innovative and high quality level of RR and how country-level driving forces influence these variables.

Details

Asian Review of Accounting, vol. 30 no. 2
Type: Research Article
ISSN: 1321-7348

Keywords

Open Access
Article
Publication date: 7 July 2023

Riffat Hasan and Oliver Kruse

The purpose of this paper is to analyse and investigate how intensified regulatory requirements related to outsourcing have influenced and changed the outsourcing activities of…

Abstract

Purpose

The purpose of this paper is to analyse and investigate how intensified regulatory requirements related to outsourcing have influenced and changed the outsourcing activities of German financial institutions.

Design/methodology/approach

The study involved interviewing 11 outsourcing experts in the German financial sector, including four of the five largest banks in Germany. In coding and analysing the collected data, this study adopted the approach of a qualitative content analysis framework.

Findings

The study found that the revised legal requirements have had a significant and potentially negative impact on the efficiency of outsourcing, leading to a necessity for German financial institutions to internally realign their outsourcing managements. The study further revealed practical realigned methods German financial institutions executed to meet the legal requirements.

Originality/value

The impact, meaning and relevance of legal requirements in the outsourcing environment of German financial institutions has been relatively under-researched from a qualitative perspective and focused on other primary fields of investigation like outsourcing decisions and outcomes. This study has, by adopting a qualitative approach, addressed the identified gap by providing first-hand insights and new knowledge.

Open Access
Article
Publication date: 25 January 2023

Johan Marx and Cecilia Jacoba de Swardt

The purpose of this research was first to determine the competencies mandatory of risk managers, and second, to consider the implications of such competencies in determining…

1078

Abstract

Purpose

The purpose of this research was first to determine the competencies mandatory of risk managers, and second, to consider the implications of such competencies in determining modules appropriate for inclusion in any prospective undergraduate qualification with specialisation in risk management.

Design/methodology/approach

A qualitative research approach was followed, involving academics teaching risk management in a focus group and making use of interactive qualitative analysis (IQA).

Findings

The competencies identified were business management skills, financial knowledge, an understanding of the risk management process, governance and compliance, people management and technical skills. These will be explained in greater detail in the paper.

Research limitations/implications

The implications for teaching are that an undergraduate curriculum in risk management will have to combine majors such as business management, financial management, risk management, industrial psychology and communication. These majors need to be complemented by modules in governance and compliance management, as well as information and communication technology.

Practical implications

The implication for practice is that risk management professionals and members of the Institute of Risk Management of South Africa need to avail themselves to serve on an advisory board of academic departments offering risk management qualifications. Risk management is a developing science and requires inputs about research and the curriculation of qualifications.

Social implications

The implication for public policy is that the South African Qualifications Authority and the Council for Higher Education should reconsider their requirements for designators (specialised qualifications). The implications for research are that IQA provides clarity on the knowledge and skills required to develop a competency-based qualification in risk management. Further research should benchmark qualifications and propose a curriculum for a bachelor’s degree in risk management.

Originality/value

The use of IQA is a novel way of ensuring rigour and objectivity in arriving at a description of the required knowledge, skills, values and attributes of risk managers. This paper will assist in the compilation of a new curriculum for an undergraduate qualification in risk management; thus, ensuring such qualification will provide a competency-based qualification that will meet the needs of the profession.

Details

Qualitative Research in Financial Markets, vol. 15 no. 3
Type: Research Article
ISSN: 1755-4179

Keywords

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