Risk Management and Governance

Introduction:

This reflective essay focuses much at the brilliant relationship between my personal experience, professional experience, and knowledge regarding governance and risk management. This essay is prepared by collecting information & research. This essay shows how my past and professional experience is linked with my study.

Governance & Risk management:

Corporate governance is a comprehensive term that includes all the actions, plans, and the overall system that oversees the overall functioning of a corporate house. It is an overall framework that clearly defines the rights and duties of employees, the relationship between management and shareholders, and the accountability of business towards all other important stakeholders. Good governance ensures that an organization is properly managed and the interests of the various stakeholders are aligned towards the company goals. (Bhagat & Bolton, 2008)

Shifting towards the term ‘governance’, it is the manner in which a group of people or a country does its activities. For me, it is nothing but how a group of people behaves, act, and how the authority within an enterprise is exercised and maintained. It involves accountability, authority, direction, leadership, and control.

Talking about my own experience with respect to governance, while I was in secondary school, I was the captain of a Women’s Basketball Team. At the point when the officials blow their whistle, we used to jump on the court. This was where I step up to be the leader of the group. I used to attempt to fortify the plays that our coach had taught us. I regularly conversed with my teammates and guides them on what to do. I looked like to be the coach among the teammates. And furthermore, I was the one driving my team on basketball rehearses. I tuned in to what partners need to state, praise, and regard them. As a captain of the team, I generally guaranteed an agreeable working relationship inside the whole team. I was the one to help settle issues, and soothe strains among team members. I was the one to choose the member to play the games and furthermore answerable for the general execution of the team.

Now I got to understand that the way I used to lead, direct, and resolve issues among teammates is actually leadership and control. Also, even I was the captain of the team, I was bound by rules and followed what the coach said is a perfect example of accountability.

Risk can be defined as the chance of loss or an unfavorable outcome associated with an action. Uncertainty is not knowing what will happen in the future. e greater the uncertainty, the greater the risk. For an individual farm manager, risk management involves optimizing Agricultural producers make decisions in a risky environment every day. (Laurence Crane, Gene Gantz, Steve Isaacs, Doug Jose & Rod Sharp, 2013)

Risk management is the means toward distinguishing, evaluating, and controlling dangers to an association’s capital and profit. These threats, or dangers, could come from a wide range of sources, including money-related vulnerability, lawful liabilities, key administration blunders, mishaps, and natural disasters. IT security threats and information-related risks, and the strategies to reduce them, have become a top need for digitized organizations. Thus, a risk management plan gradually incorporates organizations’ actions for distinguishing and controlling threats to its advanced resources, including restrictive corporate information, a client’s by and by recognizable data, and intellectual property.

I have experienced risk management 2 years ago. The annual family reunion was six months away. I was asked to organize and coordinate the event by my parents. I thought this should be easy since I have attended it every year since my childhood. Find a park, throw some dishes, and borrow a volleyball net – easy enough, I thought. However, a week before the event, my grandmother informed me that four of my cousins are vegetarians; I find out the volleyball net ripped at a park outing, and the park I selected has a ‘no dogs’ policy. To make matters worse, the day before the event, the forecast calls for a 90% chance of heavy thunderstorms. How did I get here? How I could have avoided this?

Through my own experience, risk management is identifying, assessing, prioritizing, and mitigating risks associated with any undertaking. Whether that undertaking is a family reunion or a multi-billion-dollar new construction effort, risk can derail any project if it’s not addressed upfront. Failure to conduct good risk management can result in delayed completion schedules, budget overages, frustrated team members, and ultimately, project failure.

A risk is an unplanned or uncertain event that can impact a project. If an event won’t affect the project, it’s not considered a risk. We usually understand risk as negative, but there are actually two types of risks when it comes to projects. We would define a threat as a negative risk; however, there is also a positive risk, or what we call opportunity. In our family reunion project, vegetarian family members, a ripped volleyball net, a ‘no dogs’ policy, and thunderstorms are all threats because they weren’t taken into consideration and would impact the reunion in a detrimental manner. Now I have understood what went wrong and what I could have done to reduce the risk during my family event.

Governance includes the framework by which an association is controlled and operates and the components by which it, and its people, are considered answerable. Risk Management is a component of governance. It very well may be contended to following fundamental components:

Transparency – being clear and unambiguous about the organization’s structure, tasks, and execution.

Responsibility – guaranteeing that there is clarity of decision making inside the organization, with forms set up to guarantee that the correct individuals have the correct expert for the organization

Integrity – creating and keeping up a corporate culture focused on moral conduct and consistency with the law.

Great administration, therefore, envelops not just the framework by which associations are controlled yet the systems by which associations and the individuals involved are considered answerable. Risk management is, therefore, indispensable to good governance. The governance of risk and compliance is principal to settling on the choices that set hierarchical goals and make and screen the projects to achieve them.

References:

1. (Bhagat & Bolton, 2008)
2. (Laurence Crane, Gene Gantz, Steve Isaacs, Doug Jose & Rod Sharp, 2013)
3. Rosen, Robert Eli, Risk Management and Corporate Governance: The Case of Enron. Connecticut Law Review, Vol. 35, No. 1157, 2003.
4. Ellul, Andrew, The Role of Risk Management in Corporate Governance (September 1, 2015). Kelley School of Business Research Paper No. 15-81.