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On the surface at least, it’s hard to take away positives in the wake of the financial crisis. Yes, it taught us that we have to manage risk better, improve processes and become more transparent. But it’s the regulators globally that seem to have taken these lessons closely to heart.


With some banks still struggling to conform to Basel II requirements, Basel III is being hotly debated. It will force banks to hold more capital, and many argue that this will bring the end of ‘cheap money’. In the U

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What exactly is complexity management? Why should businesses care about it? How does it compare with risk management that is currently practiced? These are some of the questions we explore in the set of 2 articles below. A third article which is a sort of a recipe for complexity management is currently "in-press" and will be following shortly.

Comments from experts and practitioners most welcome.

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My latest Powerlines newsletter can be read online - http://mim.io/62006

In this edition:



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What is the objective in any crisis?

It is to maintain company credibility and reputation, and create the perception that as an organization you are doing everything humanely to act in the positive regard to all stakeholders.

If I had the opportunity to address a Board of Directors about the need for adequate crisis response planning and emergency preparation, there are only five points we would discuss, and the discussion would take just a few minutes.

They are: Read more:http://deonbinneman.wordp

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Whistleblowing- The Psychological Paradox

I read the recent news that Mahindra Satyam (previously known as Satyam Computers) declared its financial results after two years of working at the previous fraudulent statements and restating the same. You might recall, the fraud was alleged to be perpetuated by the previous owner Ramlinga Raju the then Chairman of the organization for an amount of Rs 7000 crore (Rs 70,000 million) or more. The CFO and External Auditor (PWC) are considered accomplices in the fraud. The new owners made a stateme

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Lightning or Lightning Bug

lightning_strike_jan_2007.jpg?w=300&h=200

Mark Twain once observed that there was a difference between Lightning and Lightning Bug. An important difference.

The difference between the almost right word & the right word is really a large matter–it’s the difference betweenthe lightning bug and the lightning.

Might there be a similar difference between Risk Management System and Risk Management?


A Risk Management System is composed of org charts, policy statements, Reports, meetings,committees, computer models, powerpointsand dashboards.


Risk

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Brand Building of Risk Management Department

"Your brand is created out of customer contact and the experience your customers have of you" - Stelios Haji-Ioannou, Chairman, EasyGroup

The risk management departments are sometimes perceived in negative light due to their role in the organization. The business operation teams view the risk management departments as office police, watch dogs, critics and messengers of bad news. The basic job function of the risk management departments is to:

  1. Conduct audits and reviews of business operations and
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Q&A: Connecticut’s New Data Breach Mandate

Many states are enacting data breach notification laws, but Connecticut is the first state to have its insurance department get involved, enacting what is known as Bulletin IC-25. Wanting to know more about this recent development, I contacted Ed Goodman, chief privacy officer at Identity Theft 911. Below is our exchange:

What is Bulletin IC-25?

EG: On August 18, 2010, the Connecticut Insurance Department issued Bulletin IC-25. Bulletin IC-25 covers the handling of information security incidents t

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Risk management approach depends upon who you talk to - project managers have a different view from financial analysts who have a different approach from actuarties and so on. This can result in multiple and sometimes contradictory conclusions about the assessment of the risk of an event.

We frequently get questions about how complexity management is different from risk management. Luckily, complexity management does not suffer from this problem of diversity of opinions! But we believe that that

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When your Parachute Doesn't Open

Do you have a plan for what to do when your parachute doesn’t open?


Well, if you do not, pay attention. Here is a 6 step checklist for what to do:

  1. Signal your Buddy.
  2. Get close with your Buddy.
  3. Link your arms through his/her straps.
  4. Open his/her chute.
  5. Let your Buddy steer the chute.
  6. Suggest that he/she look for an extra soft place to land (water).

There now. Don’t you feel safer?


You say you do not parachute jump? So what good it this?


Well, you must see that this is really good advice that can be applied

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Striking the balance in data governance

Despite recent news reports that the Basel III liquidity requirements are to be pared back, financial institutions are still facing vast regulatory challenges. They already have to hold more capital and liquidity, as well as report on this daily. Going forward, institutions will also have to demonstrate the processes and controls used to put together reliable information. Never before have risk and data management been so interwoven.

The real challenges facing institutions looking to showcase the

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Learn about Smart Investment Group LLC

We are SMART INVESTMENT GROUP LIMITED LIABILITY CORPORATION. This company was the brainchild and was founded by a group of really talented real estate professionals focusing on the goal of enabling financial independence through sound financial planning and real estate investment.

Today SMART INVESTMENT GROUP is a global company with an excellent reputation for getting results. We have become a leading provider of services to individuals and companies in the areas of Mortgage Services, Credit Ser

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Getting Real About Reputation Risk

Why should organizations be concerned about Reputation Risk?


As the world become more and more networked, more and more companies are exposed to a changing set of vulnerabilities. The landscape of risk has changed. No longer can any country or organization ignore the
happenings of 911, Bali and London.


In this new world, incidents can damage a good reputation purely because an organization can take too long to act decisively with problems. For instance a reputation damaging incident can become inte

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new hedge fund

Dear Investor,
A new hedge fund is opening in Hong Kong, offering the following
yields and risk:
1. $25K Minimum Investment
a) $12K remains in a CD deposited with HSBC. This capital is not at risk.
b) $13K is utilized by the fund for first three months of operations.
2. Yield is 20% APR ($5K per year), plus $250K after one year.
Note: this offer only applies to the first $25K. Amounts after this
will obtain different yields depending on the projects they invest in.
3. The Team managing the fund is experi
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Creating a risk-focused organisation

The nature and type of risks facing the organisation:

One of the main challenges facing managers in today's constantly changing business environment is dealing with uncertainty and creating a risk-focused culture within their organisations. New technologies, new concepts (such as social media and web 2.0), and changing market dynamics are all presenting managers with both threats and opportunities.

This uncertainty has the possibility of creating or destroying customer value and shareholder value,
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A company was fined a heavy penalty the other day for a a workplace accident that was caused by the company managers condoning illegal actions, because that is the "way we have always done it in the
past".

In this case an unlicensed driver of a forklift caused an accident.

The company decided to plead guilty being negligent in terms of the Occupational Health & Safety Act, expecting a thousand rand (ZAR) fine, but thecourt decided a fine of R10000 would be more appropriate. The judge's words: " Do
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In the automotive dealership space I have seen acquisitions turn into legal tribulations when after a deal is closed personnel related non-compliance issues pop-up creating huge, multi-million dollar headaches literally days after deal close.

What was found was a fundamental disregard for the human element in the valuation of a business...what have the people been up to that reinforces the business processes that helped make the business successful as well as what they have been doing on their ow
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Most of today’s organizations feel that if they have a “Risk department”, an “Internal Audit Team” and a “strong Legal team “they are safe against everything but is it the case. I say No, having a resource team strong in their defined skill set is only one aspect of an equation and the remaining aspect is time, budget and coordination between the 3 (Risk Management Group, Internal audit team & Legal team) because Governance, Risk Management & Compliance do not act in silos, they are very much in
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Comments: 2

First they need to have a product or service that people will buy. They need revenues.

Second they need to have the ability to provide that product or service at a cost less than what their customers will pay. They needprofits.


Once they have revenues and profits, their business is a valuable asset. So third, they need to have a system to avoid losing that assetbecause of unforeseen adverse experience. They need risk management.


So Risk Management is the third most important need of a firm.

And ther

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