Money matters

Operational risk involves the actions of many business groups, so mapping out the investors and stakeholders is an organic process and a complex one. PRINCE 2 and RAMP are examples of two methodologies that place stakeholders and expected returns on paper. We can deploy risk analytical tools. We can consider poor company performance or financial loss as a hazard requiring detailed risk analysis. The causal element or risk catalyst stems from unsuitable leaders or inadequate investment managers leading to a fall in earnings and damage to business reputation. The dreaded result is the risk event, such as the adverse effect of a start-up investment loss or disastrous M&A decision. Analyse the subjective worth of the company heads – determine the value-added (positive or negative) that can be ascribed to the top management. One effective method is to interview then face to face to find the truth.2 Already, regulators are expanding and are on the war path gearing up for getting tough on criminal activity by corporate management.
The UK’s chief financial regulator is lobbying the government for the same powers as its US counterpart to stamp out accounting abuses by companies and guard against Enron-style business scandals. . . . . It would amount to the biggest shake-up of corporate accounts policing since scandals such as Maxwell and Polly Peck. Under the plan, the FSA would resemble the Securities and Exchange Commission . . .
The widening definition of crime, e.g. to include false accounts and money-laundering, mean that command-control must be established within an organisation. Some of these can be monitored automatically using computer software with AI logic. Companies that provide a rosy interpretation of balance sheets for the public need a more thorough grilling by the auditors, who are now more alert to their duty. The investors and auditors are on the offensive against fraud. The corporate barriers against truthful information for investors are being attacked, led by funds, shareholder advocacy groups and regulatory authorities.