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Posted On: 18 September 2011 02:22 pm
Updated On: 12 November 2020 02:11 pm

Risk management vital, says banker

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Doha Bank organised a knowledge-sharing session on ‘Enterprise Risk Integration’ at its corporate headquarters in West Bay. Doha Bank Group CEO R Seetharaman gave his outlook on global economy with specific focus on the GCC region and highlighted the major risks. “Slowdown in global economic growth, risk of double-dip recession, risk of downgrade of developed economies, imbalances in markets, high commodity prices and inflation in emerging economies, continued pressure in euro zone after Portugal, Italy and Greece developments and the increase in unemployment in advanced economies and risk of currency war are some of the major risks faced by the global economy,” he said. Seetharaman explained the need and relevance of enterprise risk management in firms. “A critical aspect of management responsibility is to understand and determine which risks should be taken on, and what magnitude of business consequences (in case of a failure) can be managed away. Different risk categories and their impact on business levels should be included in strategy setting. The importance of building enterprise risk awareness and ingraining it deeply into the organisational culture and processes is essential to encourage open communication between all employees and inspire interest in ERM best practices.” He also spoke about the risks involved in various verticals such as supply chain and financial risks. “There has to be a better understanding of supply chain risks and the key is to establish and maintain an effective system without underestimating the risks posed by Supply Chain issues.” Seetharaman also highlighted the financial risks, which include those involved in raising capital and market risks involving currency, interest rate and liquidity. These risks warrant immediate attention as they directly impact financial services industries.” He also touched upon various aspects of human capital risks, asset management risks, IT risks and reputation risks that plague the global economy in general and business firms in specific. On reputation risks he said: “Managing reputation is an essential part of the strategic role of the board of directors, who must take into account all stakeholders, whose perception of the organisation will determine its reputation. Risks or uncertainties, both positive and negative, must be managed in a holistic systemic approach, as there is no such thing as reputation risks - rather, all risks may impact on reputation.” This was followed by a presentation by three industry experts - Peter Kohut, Head of Financial Risk Management, KPMG; Richard Cochinos, Senior G10 FX strategist from Bank of America Merrill Lynch, and Paul Roberts, a legal expert from London. The panel session involving the industry experts was moderated by Seetharaman. In his concluding remarks Seetharaman said “Enterprise Risk Integration is a key for business transformation.” Gulf Tmes