Increasingly, top executives view supply markets as sources of competitive advantage and as means of achieving strategic objectives. Procurement is the management activity that makes this happen, and this process depends on a superior risk management capability if it is be effective. Yet, despite its importance, Procurement Risk Management is surprisingly under-developed. Recent Global Risk surveys have pinpointed Supply Chain Vulnerability as one of the four key global risks for the next decade. What is less well known is that this is only half of the story … risk exposures also exist inside the company and can be just as damaging. No company is an island; it needs suppliers as well as customers. Conventional wisdom puts great emphasis on managing certain aspects of business such as customers; operations; strategy and finances. Typically, however, much less regard is paid to external suppliers and the risks present in dealing with them. As a minimum, suppliers are the sources of materials, services and expert attention which enable the company to feed its business model. When done well, a risk-aware procurement process provides the bonus of competitive advantage, with the ability to capitalise, on the occurrence of unexpected events. This short guide explains just how to do it. Each chapter explores the topic in hand, outlines the risks and the remedies available and offers guidance on the principles and risk prevention.
Following corporate scandals and the recent bankruptcy of large financial institutions, the public believes that one of the responsibilities of governments, regulators and corporate executives is to do business in compliance with basic ethical values. It is now acknowledged that there has been a general decline in ethical standards in the business world, perhaps due in part to a celebrity culture that overvalues wealth and shallow notions of 'success'. Ethics used to be discussed only by philosophers and academics, but it is now apparent to business leaders that companies wishing to survive into the future have to develop effective protection against exposure to 'ethical risk'. This Short Guide, written by a professional with diverse international experience in auditing and fraud prevention who has specialised in ethics-related issues, serves as a resource for all who need a more complete view of the subject and practical guidance to inform their daily business decisions. Providing an overview of the theories of ethics that bear on today's business world, from Adam Smith's liberalism to stakeholder theory, the Guide explains the human behaviour that gives rise to fraud and corruption in terms of a "fraud triangle theory" according to which unethical behaviours happen when three risk components - psychological pressure, opportunity and rationalisation - are present. 'Pressure' is linked to the unfortunate superstar culture, while 'opportunity' can be reduced through application of adequate control mechanisms and corporate governance models. 'Rationalisation' has to do with the ability of an honest individual to justify a dishonest action in his own eyes. Ethics bears directly on this component and an ethical approach can prevent such self-justification. The adoption of appropriate company cultures and corporate governance models, the selection and retention of ethically sound staff and implementation of fair incentive systems are all advocated by the author, who describes the roles within an organisation of the Audit Committee and the Compliance Function. Additionally, the Guide offers a range of tools that can be applied by practitioners in the field, such as codes of conduct, compliance programmes, whistle blowing procedures and risk management processes.
There is a growing awareness across both public and private sectors, that the key to embedding an effective risk culture lies in raising the general education and understanding of risk at every level in the organization. This is exactly the purpose of David Tattam's book. A Short Guide to Operational Risk provides you with a basic yet comprehensive overview of the nature of operational risk in organizations. It introduces operational risk as a component of enterprise wide risk management and takes the reader through the processes of identifying, assessing, quantifying and managing operational risk; explaining the practical aspects of how these steps can be applied to an organization using a range of management tools. The book is fully illustrated with graphs, tables and short examples, all designed to make a subject that is often poorly understood, comprehensible and engaging. A Short Guide to Operational Risk is a book to be read and shared at all levels of the organization; it offers a common understanding and language of risk that will provide individual readers with the basis to develop risk management skills, appropriate to their role in the business.
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