Page 24 - BF Cover February 2019

COVER STORY

Evolving

Dynamics in

Corporate

Risk

Management

C orporate risk in its simplest form can be described as Environment & Data (TED), many catastrophic risks such as cyber

risk, data leakage, privacy risk and reputation risk have now been
a risk which can question financial stability as well as
the going concern feature of a company and become
staring at the face of the organisations.
a key hindrance in achieving sustainable wealth
creation for any organisation. It may impact the Risk Management dynamics
stakeholders of the company, shareholders, lenders, employees, The financial sector has always been a backbone of the real
government, creditors, customers and even the society at large. economy, giving it the much required impetus by way of either
In earlier times, corporates had a very limited definition of risk funding, insurance and/or other forms of risk management.
which primarily focused on the risk of misrepresentation in However, failures in financial markets have time and again proved
financial statements and operational risk, and therefore, the that no corporate, sector or economy is shielded from
efforts were also concentrated on managing these risks. developments across the globe. With an increase in global trade,
However, increasingly changing scenarios in business, society, there is an ever increasing dependence on different
geography and politics mean corporate risk managers across the interconnected financial markets and sectors for overall sustained
globe struggle to manage these challenges and overcome their growth and hence, newer risks in one economy quickly cascade
impact. With the growing importance of Technology, to the rest of the sectors and economies.

About the author Risk and its management by corporates has always been dynamic
and evolving. Long back the two key categories of risk which
Anshul Babbar were perceived important to the management were financial
Associate Director and operational risk. There were controls being devised to ensure
Financial Risk Management there is no financial misstatement, strict reliance on documented
KPMG in India procedures and concepts of delegation of authority over key
activities to avoid operational failures. Risk management policies

24 | 2019 | FEBRUARY | BANKING FINANCE