Reconsidering contact risk and contractual risk management

PurposeThe aim of this paper is to pursue three objectives: to assess the extent to which theoretical concepts and corporate practice are reflecting the contract’s risk management dimensions; to identify ways to make full usage of the contract’s risk dimensions for risk management purposes; to overcome the isolation of the contract caused by its perception as a legal instrument by integrating its handling into the overall corporate management processes. Design/methodology/approachLiterature is analyzed regarding the contract’s roles as a source of risk and as a risk management device. Based on the relevant findings, it uses the Contractual Management Model to develop a concept that integrates all contract-related risk management processes in an enterprise. FindingsThe paper redefines the term “contract risk” in the light of modern understanding of contract functions and contract purposes. It shows that only Contractual Risk Management theory takes the management capacity of the contract fully into account. A Contractual Risk Management process is suggested which integrates all contract-related corporate management processes and aligns them to the requirements of transaction risk management and enterprise risk management. Originality/valueThe paper may guide executives to optimize corporate risk management processes through a better understanding of the risk potential of contract and of its risk management capacity. It provides a checklist of redefined contract risks as well as a concept that, for the first time, is aligning all contract-related management processes to support the corporate risk management system.

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Measuring project risk management process for construction contractors with statement indicators linked to numerical scores

Engineering Construction & Architectural Management ◽

10.1108/09699981011056556 ◽

2010 ◽

Vol 17 (4) ◽

pp. 336-351 ◽

Cited By ~ 17

Author(s):

Grant Kululanga ◽

Witness Kuotcha

Keyword(s):

Risk Management ◽

Construction Industry ◽

Management Practices ◽

Project Risk Management ◽

Management Process ◽

Project Risk ◽

Content Type ◽

Management Processes ◽

Risk Management Process ◽

Sub Saharan

PurposeThere is relatively low implementation of formal project risk management methods in practice, leading to the construction industry consistently suffering from poor project performance. This study aims to ascertain the extent to which current project risk management practices are used by construction contractors in one of the countries of the sub‐Saharan region – Malawi.Design/methodology/approachA management process tool with statement indicators linked to numerical scores was conceived that characterised a series of steps of project risk management process. To ascertain the degree to which project risk management processes were used, a questionnaire survey was employed. Data were elicited from registered Malawian construction contractors on the elements underlining a series of steps of project risk management process as espoused by the literature. Out of 84 sampled construction contractors, 51 completed questionnaires were received.FindingsApart from large‐sized and more experienced construction contractors, all the small and medium‐sized construction contractors – which constitute the largest proportion of the construction industry – were characterised by a low implementation of the various required steps for the project risk management process. The application of project risk management processes was significantly influenced by the various categories of size and experience of the surveyed construction contractors at p<0.01. Furthermore, contingence planning within the series of steps of project risk management process featured highly among the surveyed construction contractors. The majority of the variables under the series of steps of project risk management process were positively and significantly linked to progression in size and experience of construction contractors at p<0.01.Research limitations/implicationsThe study forms the basis for further research; replication of this study to other parts of world about how the actual implementation of the series of steps of project risk management process is undertaken could yield rich lessons for the construction industry.Practical implicationsThe intentional move by industry towards measuring management processes as a precursor to uncovering the root causes that underlie project success or failure to provide quick feedback for remedial action is supported by an approach such as this.Originality/valueThe originality of this paper lies in its uniqueness for a systematic approach to quantifying the project risk management processes with the view to understanding the implementation behaviours of construction contractors in one country in the sub‐Saharan region.

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Stakeholder approach in benchmark of corporate risk management

Strategic decisions and risk management ◽

10.17747/2078-8886-2017-4-5-16-29 ◽

2017 ◽

pp. 16-29 ◽

Cited By ~ 1

Author(s):

V. M. Makarova

Keyword(s):

Risk Management ◽

Normative Values ◽

Control Points ◽

Corporate Risk Management ◽

Investment Projects ◽

Methods Of Analysis ◽

Management Processes ◽

Depth Analysis ◽

Corporate Risk ◽

Huge Variety

Decision-making regarding cooperation with a particular company requires a sufficiently in-depth analysis of the attractiveness and prospects of such cooperation. Standard methods of analysis, such as analysis of economic activity, investment attractiveness and efficiency of investment projects, undoubtedly remain the main ones in the organization of interaction, but due to the fact that most companies deviate from the normative values of activity and still remain attractive enough for cooperation, the analysis of the efficiency of intrafirms corporate processes is becoming increasingly popular. The huge variety of risk management methods, along with the inability to obtain reliable information about the methods used within the firm, force stakeholders to pay attention to indirect signals of effectiveness evaluation. In the course of the research, it was suggested that stakeholders have their own judgment about the effectiveness of intracorporate management processes that are different from common valuation techniques and conducted their own research. Based on the survey data conducted with representatives of the top management of various sectors of the economy, a list of relevant criteria for the effectiveness of intra-corporate risk management was obtained. The use of statistical methods of analysis and methods of scientific knowledge allowed to develop a mathematical methodology for evaluating these criteria, and empirical data of 88 Russian companies in the non-financial sector were used as a basis for calculating control points for application in practice. The theoretical significance is the identification of points of control of the effectiveness of risk management from the perspective of stakeholders; practical relevance reflects the toolkit for comparing the company with the best practices.

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THEORETICAL AND METHODOLOGICAL ASPECTS OF RISK-MANAGEMENT OF BANKS

Economic Analysis ◽

10.35774/econa2018.04.271 ◽

2018 ◽

pp. 271-276

Author(s):

Ihor Hutsal

Keyword(s):

Risk Management ◽

Process Control ◽

Information Provision ◽

Management Process ◽

Corporate Risk Management ◽

Risk Management Process ◽

Cyclical Process ◽

Methodological Aspects ◽

Corporate Risk

The theoretical and practical aspects of risk management are considered. The guidelines of strategic and corporate risk-management are outlined. It is stated that risk-management is a cyclical process that involves the following stages: classification and identification, assessment, organization of the risk management process, control and monitoring. The identification of risks is the decisive stage of risk-management. It is based on the information provision of the process of their classification. The principles and functions of corporate risk-management are considered.

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Do agency conflicts between managers and shareholders affect corporate risk management and financial performance of Saudi firms?

Journal of Investment Compliance ◽

10.1108/joic-11-2020-0044 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Lamia Jamel ◽

Hanadi Eid Albogami ◽

Mazen Abduljahn Abdulaal ◽

Nuha Ahmed Aljohani

Keyword(s):

Risk Management ◽

Financial Performance ◽

Conflicts Of Interest ◽

Stock Exchange ◽

Risk Level ◽

Agency Conflicts ◽

Corporate Risk Management ◽

Content Type ◽

Corporate Risk ◽

The Impact

Purpose The purpose of this paper is to examine the impact of agency conflicts between managers and shareholders on corporate risk management and financial performance of Saudi firms listed in the Saudi Stock Exchange Tadawul. Design/methodology/approach To investigate the effect of agency conflicts between managers and shareholders on corporate risk management and financial performance, we use a sample of 180 Saudi firms listed in the Saudi Stock Exchange Tadawul during the period from 2009 to 2018. Econometrically, we employ Vector Autoregressive (VAR) and General Linear Model (GLM) techniques as an appropriate methodology. Findings Our findings show that the risk level of the last year increase the corporate risk management and the performance of Saudi firm. We remark that the separation amongst control and ownership generates agency conflicts amongst managers and shareholders which can affect their behavior in decision-making and performance of the Saudi firms. Thus, the conflicts of interest arise from the differences among the work horizon, the risk assumed, the performance of enterprises, and the level of remuneration desired by the managers and shareholders in the case of Saudi firms. Originality/value The main contributions of our paper prove that the deepen the study of agency costs linked to a shareholding structure through the analysis of monitoring, obligation, and opportunity costs in the Saudi firms.

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The toolkit for financial risk management in financially unsustainable corporations

Financial Analytics Science and Experience ◽

10.24891/fa.13.1.50 ◽

2020 ◽

Vol 13 (1) ◽

pp. 50-70 ◽

Cited By ~ 1

Author(s):

M.V. Charaeva

Keyword(s):

Risk Management ◽

Financial Risk ◽

Systems Approach ◽

Financial Risks ◽

Strategic Development ◽

Corporate Risk Management ◽

Financial Risk Management ◽

Risk Management Process ◽

Equity Management ◽

Corporate Risk

Subject. Financial risk management is a cornerstone for the strategic development of any corporation. This especially matters when the economy is volatile and the financial standing of the corporation is affected externally. In this case, it is important to find tools to manage financial risks during the unstable period of corporate operations. Objectives. The study aims to devise and substantiate tools for financial risk management by identifying them and striving to reduce the exposure of financial operations during the strategic period. Methods. To substantiate the above ideas, I apply a systems approach. Studying equity management, I use methods of logic and structural analyses, synthesis, induction, deduction, graphic interpretation, mapping of relationships. Results. The study was proved with the case of Coca-Cola HBC Russia. Following a step-by-step strategy, I identified risks, their causes, and the appropriateness of the strategy for their reduction as part of the full financial risk management process (ERM). Conclusions and Relevance. The study gave theoretical and practical results that contribute to the methodology for financial risk management. I specify what tools will work to evaluate financial risks, and find techniques for avoiding, preventing and eliminating their impact on corporate operations. I discover the dependence of factors, which influence the financial position and possibilities of eliminating adverse effects that cause the exposure of financial operations and financial wellbeing of corporations. The findings can be used by those responsible for corporate risk management in financial risk management. The findings can underlie further research into the identification, assessment and management of financial risk during the volatility of the economy.

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Managing coastal risks at the Wadden Sea: a societal perspective

Disaster Prevention and Management An International Journal ◽

10.1108/dpm-04-2017-0074 ◽

2018 ◽

Vol 27 (1) ◽

pp. 15-27 ◽

Cited By ~ 1

Author(s):

Birgit Gerkensmeier ◽

Beate M.W. Ratter ◽

Manfred Vollmer ◽

Cormac Walsh

Keyword(s):

Risk Management ◽

Wadden Sea ◽

Social Process ◽

Content Type ◽

Management Processes ◽

Risk Management Process ◽

Efficient Level ◽

Coastal Risk ◽

First Time

Purpose The trilateral Wadden Sea Region (WSR), extending from Den Helder in the Netherlands, along the German North Sea coast, to Esbjerg in Denmark, constitutes a unique but vulnerable coastal landscape. Vulnerability to environmental and societal risks is expected to increase in coming decades with encompassing new challenges such as demographic changes and conflicting uses of space, both on land and at sea. Meeting these challenges will require a shift toward an understanding of risk management as a social process, marking a significant departure from the dominant technical risk management paradigm. The paper aims to discuss these issues. Design/methodology/approach In practice, this paradigm shift requires participatory stakeholder engagement, bringing together multiple and diverse perspectives, interests and concerns. This paper aims to support the implementation and expansion of enhanced social processes in coastal risk management by presenting a case study of participatory risk management process. Implemented in collaboration with a trilateral stakeholder partnership, the authors present a mixed-method approach which encouraged a joint, deliberate approach to environmental and societal risks within an overall framework. Findings The results enable the authors to deduce implications of participatory risk management processes for the WSR, wherein the partnership can act as a communicator and ambassador for an improved understanding of risk management as a social process. Originality/value In this context, the trilateral dimension, discussed here for the first time in relation with coastal risk management processes in the WSR, is emphasized as an efficient level that offers room for enhanced participatory and negotiation processes that are crucial for enhanced risk management processes.

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