scholarly journals Derivatives or climate insurance? Risk management tools for a soybean farmer in Brazil

2021 ◽  
Vol 8 (1) ◽  
pp. 72-87
Author(s):  
Fernanda Bortoluzzi Lorenzetti ◽  
Edison Luiz Leismann ◽  
Cláudio Antônio Rojo
Keyword(s):  
Risk Management ◽  
Cost Benefit ◽  
Future Market ◽  
Insurance Risk ◽  
Climate Data ◽  
Management Tools ◽  
Enterprise Risk ◽  
Soybean Price ◽  
Price Insurance ◽  
The Cost

This paper aims to analyze whether there is a difference between the cost/benefit of climate risk reduction and cost/benefit of soybean price in Palotina, Paraná, Brazil. The data were collected from bibliography, official and private documents. Climate data were analyzed based on the releases content. The methodology to analyze de future market data was the same as the B3. Options were analyzed as Black & Scholes model. Also, this paper developed the Leismann & Bortoluzzi index to analyze the protections cost/benefit. To compare mitigation costs, there were used the t student test. Limitations were about the Black & Scholes model, which does not consider subjective variables. Cost/benefit index of price protections were compared with the climate insurance index in order to test if there was a statistical difference between them. All tests allowed to infer that the indices are statistically different. This study concluded that climate and price insurance are excellent tools for rural enterprise risk management, and there was significant evidence to infer that the protections are feasible. Or rather, that the farmer is exposed to both types of risk and that the forms of mitigation are satisfactory in both cases. 

scholarly journals STRATEGIC APPROACH TO MANAGING THE RISK OF THE COMPANY'S BUSINESS PORTFOLIO

Management ◽  
2018 ◽  
Vol 27 (1) ◽  
pp. 111-118
Author(s):  
Liudmyla M. GANUSHCHAK-EFIMENKO ◽  
Mаryana S. SHKODA ◽  
Оlena M. NIFATOVA
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Enterprise Risk Management ◽  
Economic Feasibility ◽  
Innovation Activity ◽  
Management Mechanism ◽  
Management Tools ◽  
Management Measures ◽  
Strategic Approach ◽  
Enterprise Risk

Introduction and purpose of the research: The inevitable condition of management is uncertainty. Innovation activity is more risky than other areas of entrepreneurship. In the conditions of instability of the economic situation, the problem of the risk of loss when the company invests in innovations becomes especially relevant.Hypothesis of scientific research. It is assumed that the justification of enterprise risk management measures should be based on the synthesis of the economic feasibility of the method and its ability to address the risk, which will enable competent executives to choose effective risk management tools for the enterprise.The aim is to study the process of risk management in the innovation activity of the enterprise, to develop and substantiate the recommendations for the formation of the enterprise risk management mechanism taking into account the ownership form and its size.Research methods:- comparison methods to identify the weak and strong points of the classification schemes, methods of risk assessment and management;- systematization and classification to determine the characteristics (advantages, disadvantages, peculiarities of application) of methods of enterprise risk assessment, risk management methods and construction of a classification scheme of enterprise risks as the basis of the mechanism of its risk management;- decompositions in the construction of a business risk card due to the division and analysis of the totality of its business activities;- expert assessments in determining the enterprise risks for small, medium and large enterprises in the field of mechanical engineering.Results: substantiated and solved problems of implementation of the strategic approach in project risk management at the enterprise.Conclusions: the mechanism of enterprise risk management based on the system approach combines the administrative, legal and organizational components, makes it possible to identify the risks of the company in three aspects (industry characteristic, form of ownership, size), ensures the formation of a portfolio of risks of a particular enterprise and creates the principles for improving the management mechanism for them.

Is-it worth investing in NBS aiming at mitigating water risks? Insights from the economic assessment of NAIAD case studies

2020 ◽  
Author(s):  
Philippe Le Coent ◽  
Cécile Herivaux ◽  
Javier Calatrava ◽  
Roxane Marchal ◽  
David Mouncoulon ◽  
...  
Keyword(s):  
Risk Management ◽  
Cost Effectiveness ◽  
Case Studies ◽  
Economic Efficiency ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Economic Assessment ◽  
Physical Models ◽  
Valuation Methods ◽  
The Cost

<p>The economic advantage of NBS solutions aiming at mitigating water-risk is widely put forward as an argument for their development. There is nevertheless limited scientific evidence to support this argument. This paper therefore elaborates a methodological framework for the economic assessment of NBS and presents its application to three NAIAD case studies (the Lez catchment, France; Rotterdam, the Netherlands and Brague catchment, France). Robust methods are particularly applied for the estimation of the benefits associated with NBS. Physical models coupled with damage estimation models are developed to estimate the avoided damages generated by NBS. A diversity of ecosystem service valuation methods are also applied to evaluate the monetary value of NBS co-benefits: contingent valuation (Brague), choice experiment (Lez) and direct valuation methods (Rotterdam). We estimate the cost of implementation and maintenance mainly through the transfer of values coming from studies in similar contexts. Proxies are used to estimate the opportunity costs associated with the development of NBS. Finally, these estimations are compiled in a cost-benefit indicator allowing the estimation of the economic efficiency of NBS strategies. The study confirms that the cost of implementation and maintenance of NBS strategies is lower than the cost of grey solutions for the same level of water risk management, emphasizing the better cost-effectiveness of these solutions. Benefits in terms of avoided damages are however not sufficient to cover investment and maintenance costs. The cost–effectiveness of NBS strategies, which are combinations of individual NBS measures, may be improved by combining cost effective individual NBS measures. There is indeed a very large heterogeneity of cost-effectiveness of individual NBS measures (cost/m<sup>3</sup> of water retention). Results also reveal that co-benefits represent the largest share of the value generated by NBS strategies. It is therefore of utmost importance that co-benefits are integrated in the economic valuation of NBS for them to be judged economically efficient. This conclusion must be taken into account in the elaboration of NBS funding strategies.There is finally no clear-cut conclusion on the overall economic efficiency of NBS throughout the case studies. Lez reveal a positive cost-benefit analysis, while Rotterdam and Brague cases do not. Results are therefore case-specific and confirm the importance to carry out thorough economic valuations of a diversity of strategies at each sites, including NBS, grey and hybrid solutions, in order to identify the most adequate strategy for water risk management and to address territorial challenges.</p>

scholarly journals Integrating cost–benefit analysis into the NIST Cybersecurity Framework via the Gordon–Loeb Model

2020 ◽  
Vol 6 (1) ◽  
Author(s):  
Lawrence A Gordon ◽  
Martin P Loeb ◽  
Lei Zhou
Keyword(s):  
Risk Management ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Cost Effective ◽  
Benefit Analysis ◽  
Logical Approach ◽  
Explicit Recognition ◽  
Effective Level ◽  
The Cost

Abstract The National Institute for Standards and Technology (NIST) Cybersecurity Framework has rapidly become a widely accepted approach to facilitating cybersecurity risk management within organizations. An insightful aspect of the NIST Cybersecurity Framework is its explicit recognition that the activities associated with managing cybersecurity risk are organization specific. The NIST Framework also recognizes that organizations should evaluate their cybersecurity risk management on a cost–benefit basis. The NIST Framework, however, does not provide guidance on how to carry out such a cost–benefit analysis. This article provides an approach for integrating cost–benefit analysis into the NIST Cybersecurity Framework. The Gordon–Loeb (GL) Model for cybersecurity investments is proposed as a basis for deriving a cost-effective level of spending on cybersecurity activities and for selecting the appropriate NIST Implementation Tier level. The analysis shows that the GL Model provides a logical approach to use when considering the cost–benefit aspects of cybersecurity investments during an organization’s process of selecting the most appropriate NIST Implementation Tier level. In addition, the cost–benefit approach provided in this article helps to identify conditions under which there is an incentive to move to a higher NIST Implementation Tier.

Enterprise Risk Management and the Cost of Capital

2016 ◽  
Vol 85 (1) ◽  
pp. 159-201 ◽  
Author(s):  
Thomas R. Berry-Stölzle ◽  
Jianren Xu
Keyword(s):  
Risk Management ◽  
Cost Of Capital ◽  
Enterprise Risk Management ◽  
Enterprise Risk ◽  
The Cost

scholarly journals Analisis Manfaat Ekonomi dan Identifikasi Risiko Investasi Sistem Treasury Dealing Room (TDR): Studi Kasus Direktorat Jenderal Perbendaharaan

2018 ◽  
Vol 3 (3) ◽  
pp. 202-218
Author(s):  
Bagus Utomo
Keyword(s):  
Risk Management ◽  
Economic Benefits ◽  
Enterprise Risk Management ◽  
It Business Value ◽  
Integrated Framework ◽  
Enterprise Risk ◽  
Directorate General ◽  
Potential Risks ◽  
The Cost ◽  
Total Project

Minister of Finance has authority to manage state finances covering cash and securities. To increase Non-Tax State Revenue and reduce the cost of funding, the Directorate General of Treasury build Treasury Dealing Room (TDR). The Budget for information system/information technology (IS/IT) is 74% of the total project budget. This study aims to analyze economic benefits of TDR system investment. Generic IS/IT business value table is used to identify the benefits for the organization and digital prosperity framework for the country. Systems dynamics is used to analyze the interrelationship between business benefits to obtain key business benefits. Quantification is based on IT metrics and assumptions on calculating the value of TDR funds. This research also identifies risks using COSO Enterprise Risk Management-Integrated Framework. Thematic analysis is used to process qualitative data. The results show that investment of TDR systems can reduce the cost of money (RCO-09), increasing revenue caused by increasing business capacity (IRE-01) and widening market segment (IRE-04). The total value of benefits for five years amounted to Rp655.294.873.957. The benefits for the country are increasing efficiency and a larger and more efficient market. Eleven potential risks covering regulatory, coordination, technology, and human resources aspects are obtained.   Menteri Keuangan bertugas mengelola keuangan negara yang mencakup kas dan surat berharga. Untuk meningkatkan Penerimaan Negara Bukan Pajak serta mengurangi biaya menghimpun dana, Direktorat Jenderal Perbendaharaan berinisiatif membangun Treasury Dealing Room (TDR). Anggaran investasi sistem informasi/teknologi informasi (SI/TI) mencapai 74% dari total biaya proyek. Penelitian ini bertujuan menganalisis manfaat ekonomi investasi sistem TDR. Metode yang digunakan untuk identifikasi manfaat bisnis bagi organisasi adalah tabel manfaat bisnis SI/TI generik, sedangkan kerangka pikir kesejahteraan digital digunakan untuk identifikasi manfaat bagi negara. Pendekatan system dynamics digunakan untuk menganalisis keterkaitan antar manfaat bisnis sehingga diperoleh manfaat bisnis utama. Kuantifikasi dilakukan berdasarkan metrik TI dan asumsi-asumsi perhitungan nilai dana TDR. Penelitian ini juga melakukan identifikasi risiko menggunakan COSO Enterprise Risk Management-Integrated Framework. Analisis tematik digunakan untuk mengolah data yang bersumber dari wawancara, diskusi, dan studi dokumen. Hasil penelitian menunjukkan bahwa investasi sistem TDR mampu mengurangi biaya uang/bunga pinjaman (RCO-09), meningkatkan pendapatan yang disebabkan oleh meningkatnya kapasitas bisnis (IRE-01) dan segmentasi pasar (IRE-04). Total nilai manfaat ekonomi selama lima tahun sebesar Rp655.294.873.957. Manfaat investasi sistem TDR bagi negara yaitu meningkatkan efisiensi dan pasar yang lebih luas dan efisien. Berdasarkan identifikasi risiko, diperoleh sebelas potensi risiko yang mencakup aspek peraturan, koordinasi, teknologi, dan Sumber Daya Manusia.

scholarly journals Systematic Enterprise Risk Management by Integrating the RISMC Toolkit and Cost-Benefit Analysis (Final Report)

2021 ◽  
Author(s):  
Zahra Mohaghegh ◽  
Tatsuya Sakurahara ◽  
John Beal ◽  
Wen-Chi Cheng ◽  
Pegah Farshadmanesh ◽  
...  
Keyword(s):  
Risk Management ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Enterprise Risk Management ◽  
Final Report ◽  
Benefit Analysis ◽  
Enterprise Risk

scholarly journals Using digit analysis to evaluate financial reporting risk in the enterprise risk management process

2008 ◽  
Vol 6 (1-4) ◽  
pp. 443-448
Author(s):  
Shirley J. Daniel ◽  
Liming Guan ◽  
John P. Wendell
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Boards Of Directors ◽  
Enterprise Risk Management ◽  
Audit Committees ◽  
Management Tools ◽  
Rating Agencies ◽  
Enterprise Risk ◽  
Risk Management Process ◽  
Reported Earnings

Boards of Directors and their audit committees are responsible for the oversight of risk management for the enterprise. Because entities are being asked by rating agencies to more explicitly describe their enterprise risk management processes, boards and management will be well served to employ risk management tools to efficiently and effectively assist them in identifying areas of higher financial reporting risk. Studies using digit pattern analysis of earnings have consistently found that reported earnings are subject to misstatements due to inappropriate rounding. Recent actions by regulators make it clear that such misstatements, even when relatively small in magnitude, are unacceptable. This article provides guidelines and a new tool for preventing and detecting such misstatements

scholarly journals Use of the cost-benefit analysis method in the risk management process of SMEs

2021 ◽  
Vol 129 ◽  
pp. 03019
Author(s):  
Katarina Makka ◽  
Katarina Kampova
Keyword(s):  
Risk Management ◽  
Cost Benefit Analysis ◽  
Main Idea ◽  
Value Added ◽  
Cost Benefit ◽  
Management Process ◽  
Analysis Method ◽  
Benefit Analysis ◽  
Risk Management Process ◽  
The Cost

Research background: Property protection is a worldwide very often used term in the conditions of various sectors. It represents a set of measures that have a preventive effect on the risk of damage to the building. The issue of property protection does not only concern organizations, but also every person who is the owner of a property in which his important interests are located. The protection of buildings is a current topic on a global scale, mainly to ensure the proper functioning through the protection of all important tangible and intangible assets of company. Purpose of the article: The main idea of this article is to approach the issue and create a risk management process, focusing on dealing with risks in the conditions of a particular company, in this step we will use a cost-benefit analysis to help decide on the implementation or rejection of a project to protect the selected object. Methods: Before applying the method of cost-benefit analysis to a specific case of protection of the object of the selected company, it was necessary to characterize the selected company and find out which risks are unacceptable through the creation of a risk management process. The risk management process was created based on structured and unstructured interviews with the company’s employees. Findings & Value added: The proposed procedure for risk management and application of the method of cost-benefit analysis in the process of risk management are applicable in the conditions of any other organization in order to create an effective project for the protection of the object. If necessary, the procedure for using the cost-benefit analysis method can be adjusted to suit the needs and conditions of the problem of a particular organization.

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