scholarly journals A proposed operational risk management framework for small and medium enterprises

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Micheline J. Naude ◽  
Nigel Chiweshe
Keyword(s):  
Risk Management ◽  
Small And Medium Enterprises ◽  
Relevant Literature ◽  
Management Strategies ◽  
Operational Risk ◽  
Management Framework ◽  
Operational Risk Management ◽  
Operational Risks ◽  
Risk Management Framework ◽  
Medium Enterprises

Background: The gap between small and medium-sized enterprises (SMEs) and large businesses that perform risk assessment is significant. SMEs continuously face many operational risks and uncertainties in their daily operations, and these risks threaten to reduce productivity, increase costs and reduce profits.Aim: The purpose of this article was to develop an operational risk management framework that SMEs can use to identify and analyse risks in their operations and take corrective actions to mitigate these risks.Setting: Small and medium-sized enterprises in South Africa do not view risk management as a key component of organisational success, despite evidence that businesses that adopt risk management strategies are more likely to survive and grow.Methods: The article is exploratory in nature, and a conceptual analysis approach was used to formulate the framework. This study reviewed relevant literature sources on risk published between 2002 and 2017.Results: The four process steps of risk management were used as a reference point and form the foundation for the operational risk management framework. The categories of operational; marketing; technical and financial risks were identified from a review of available literature on risk management.Conclusion: There is a dearth of research that deals with operational risk management frameworks for SMEs. The expected contribution of this article, therefore, is twofold: firstly, it is envisaged that managers or owners of SMEs could use the proposed framework as a tool to appraise and minimise their operational risks; secondly, it will add to the current body of knowledge on risk appraisal for SMEs.

Implementing an Operational Risk Management Framework: Psycho-Social Factors in Tanzania

2012 ◽  
Vol 22 (1) ◽  
pp. 77-86 ◽  
Author(s):  
Annelize van Niekerk ◽  
Dirk J Geldenhuys ◽  
Madia M Levin ◽  
Michelle May ◽  
K.P. Moalusi
Keyword(s):  
Risk Management ◽  
Social Factors ◽  
Operational Risk ◽  
Management Framework ◽  
Operational Risk Management ◽  
Risk Management Framework

scholarly journals Challenges facing banks in emerging countries to be Basel compliant for operational risk

2008 ◽  
Vol 5 (3) ◽  
pp. 284-290
Author(s):  
Jackie Young
Keyword(s):  
Risk Management ◽  
Operational Risk ◽  
Central Banks ◽  
Emerging Countries ◽  
Practical Approach ◽  
Basel Accord ◽  
Management Framework ◽  
Operational Risk Management ◽  
Risk Management Framework ◽  
Critical Issues

The New Basel Accord identified various requirements for an effective operational risk management framework. Most central banks and regulators adopted these requirements for their own banking environments. However, there are many challenges facing these banks to ensure the effective incorporation of such a framework. An end-result of establishing an operational risk management framework is to calculate and allocate a realistic capital charge for operational risk. To achieve this, various principles and methodologies must be embedded that will ensure a practical approach to operational risk management. This paper aims to identify certain critical issues and challenges for banks of emerging countries to consider when developing an operational risk management framework in order to comply with the Basel requirements.

Development and Implementation of an Operational Risk Management Framework Aligned With ISO 31000

2012 ◽  
Author(s):  
David Weir ◽  
Susan Urra
Keyword(s):  
Risk Management ◽  
Cultural Change ◽  
Operational Risk ◽  
International Standards ◽  
Management Framework ◽  
Operational Risk Management ◽  
Risk Management Framework ◽  
Early Results ◽  
Risk Management Process ◽  
Iso 31000

The International Standards Organization (ISO) standard 31000 (Risk Management – Principles and Guidelines) provides guidance on the development of a systematic approach to managing risk within an organization. Using ISO 31000 as a guide, Enbridge Pipelines has enhanced its existing release-focused risk-informed decision-making approach and risk management process. The development of this enhancement has involved engagement of all levels of management and staff, and has required consideration of corporate cultural change, staff communication and training, development of performance measures, and management reporting. This paper provides a high level overview of the ISO 31000 standard as it pertains to its use in the development of the Enbridge Pipelines operational risk management framework, the roadmap for implementation of the framework, and discusses the challenges, successes, learnings, and early results of implementing the framework in a large multi-national pipeline company.

Operational Risk Disclosure Practices in Emerging Economies

2020 ◽  
pp. 172-195
Author(s):  
Harshmeeta Kaur Soni ◽  
Muneesh Kumar
Keyword(s):  
Risk Management ◽  
Operational Risk ◽  
Risk Disclosure ◽  
Management Framework ◽  
Operational Risks ◽  
Risk Management Framework ◽  
Reserve Bank ◽  
Indian Banks ◽  
New Guidelines ◽  
Risk Disclosures

Risk disclosures provide an insight into the risk management policies and practices adopted by institutions and are useful in assessing the risk for various stakeholder groups. With the increasing incidence and complexity of operational risks in banks, it is imperative for banks to establish and follow suitable operational risk disclosure practices. The chapter attempts to examine the operational risk disclosure practices and the impact of bank specific characteristics on disclosure practices among Indian banks. Findings indicate disclosure levels to be inadequate, showing an insignificant improvement over the years. Bank profitability and depositor confidence significantly impact disclosure practices. The authors suggest that Indian banks should enhance their current operational risk disclosure levels to communicate to the stakeholders about the strength of their operational risk management framework. The Reserve Bank of India may issue new guidelines with respect to minimum disclosure requirements on operational risk to improve the quality of disclosures.

scholarly journals OPERATIONAL RISK MANAGEMENT STRATEGIES AND THE GROWTH OF MICROFINANCE SECTOR IN KENYA

2017 ◽  
Vol 2 (2) ◽  
pp. 42
Author(s):  
Dr. James Rurigi Njuguna ◽  
Prof. Roselyn Gakure ◽  
Dr. Anthony Gichuhi Waititu ◽  
Dr. Paul Katuse
Keyword(s):  
Risk Management ◽  
Internal Control ◽  
Management Strategies ◽  
Internal Audit ◽  
Operational Risk ◽  
Operational Risk Management ◽  
Operational Risks ◽  
Use Of Resources ◽  
Policies And Procedures ◽  
Risk Management Strategies

Purpose: The purpose of this study was to establish how operational risk management strategies lead to growth of MFI sector in Kenya.Methodology: The study adopted a correlation survey research design. The population of this study was fifty seven (57) MFIs. The sampling frame was the list of MFIs provided in the AMFI website www.amfikenya.com. A sample of thirteen (17) MFIs was selected using the random sampling approach. A questionnaire and an interview schedule were the main data collection tools. Qualitative data was analyzed using content analysis whereas the quantitative data was analysed using Statistical Package for Social Sciences (SPSS) where descriptive and regression analysis were conducted to determine the relationship between enterprise risk management strategies and growth of MFIs.Findings: Findings revealed that the MFI had adequate policies and procedures to manage its operational risks and the MFI had an operations manual. The findings also indicated that the MFIs have adhered to written policies and procedures to manage operational risks in the financial operations area, procurement area, treasury area, and financial management area. Results further indicated that the MFI had effective internal control systems for detecting fraud or other significant operational risks. Finally the study findings indicated that MFI’s internal audit functions ensured effective use of resources, accurate financial reporting, and ample random spot checks of MFI branches, clients, and staff. The regression results indicated that there was a positive relationship between operational risk management strategies and MFI growth.Unique contribution to theory, practice and policy: The study recommends that the MFIs to continue practicing effective operational risk management practices such as internal control framework comprising of policies and procedures. MFIs need to uphold the existence and accessibility of operational manuals. It is suggested that adherence to written policies and procedures is positive strategy and it should be emphasized.  The internal audit functions for effective use of resources and accurate financial reporting needs to be emphasized as it had a positive effect on growth. The MFIs should also benchmark their technology with that of banks to reduce human error, to produce timely and relevant data. It is recommended that implementation of know your client (KYC) requirements should be enhanced as it has an effect on growth.

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