Comprehensive Risk Management System Research Articles

Exploring the Association Between Corporate Financial Credit Risk Management and Corporate Value

In the rapidly changing business environment, corporate financial credit risk management has become a key factor in the stable operation and continuous value enhancement of enterprises. Corporate value is reflected not only in its tangible assets but also in its intangible assets and management capabilities. Among them, financial credit risk management, as an important part of corporate management, is increasingly being paid attention to for its association with corporate value. Financial credit risk management involves the identification, assessment, monitoring, and control of risks related to financial activities, which may stem from market changes, credit defaults, operational errors, and more. Effective financial credit risk management not only helps enterprises reduce potential losses and protect asset safety but also enhances the market reputation and competitiveness of enterprises, thereby increasing their overall value. With the continuous development of financial markets and the strengthening of globalization trends, the financial credit risks faced by enterprises are becoming increasingly complex and varied. Therefore, building a comprehensive financial credit risk management system and enhancing the risk management capabilities of enterprises have become key to achieving sustainable development and creating long-term value.

A Brief Discussion on Reputation Risk and Management of Insurance Company

The reputation of insurance companies plays a crucial role in building consumer trust, thus affecting consumers' purchase intention to buy insurance products and services. Insurance companies with a good reputation will have higher customer loyalty and more easily stimulate consumers' potential insurance demand. This paper will study the factors that affect the reputation risk of insurance companies. The quality of the staff, the level of enterprise management, corporate charisma, financial indicators, and media coverage are 5 factors that affect the reputation risk of insurance companies. It is of great significance for insurance companies to strengthen reputation risk management, avoid and control reputation crisis events, and incorporate reputation risk into their comprehensive risk management system. Therefore, this paper proposes some suggestions for strengthening the reputation risk management of insurance companies. First, the awareness of the reputational risk of insurance companies should be improved; Second, improve the quality of insurance products and services; Third, establish an effective reputational risk management mechanism for insurance companies; Finally, improve the information disclosure system of insurance companies.

THEORETICAL FOUNDATIONS OF RISK MANAGEMENT FOR ENERGY SECTOR ENTERPRISES

In a rapidly evolving energy environment, effective risk management is paramount to ensuring the stability and success of businesses. This article examines a systematic approach to risk management in the energy sector, emphasizing the development of strategies adapted to a specific enterprise.The study delves into the various models used in the energy sector to manage risk. Energy balance models, energy network models, economic-mathematical models, demand and production forecasting models, risk management system models, renewable energy sources (RES) models, and system dynamic models are discussed. The study proposes a comprehensive risk management system for the energy sector, including SWOT analysis, Delphi method, sensitivity analysis and simulation modeling. The approach involves a detailed analysis of internal and external factors, expert assessments and scenario testing for the formulation of adaptive risk management strategies, taking into account regional characteristics, prioritizing resistance to change, aligning them with modern industry challenges. Given the competitive and dynamic nature of the energy sector, the study uses SWOT analysis and the Delphi method as key methodologies. The results of the study emphasize the need for a comprehensive risk management system in energy. A systematic approach combining various analytical methods is proposed, aimed at maximizing sustainability and competitiveness. The decision support system, which can be built on the basis of the developed methodology, will be automatically adapted to specific enterprises, and will facilitate prompt response to changes and optimize risk management strategies. The developed concept of a systemic approach to consideration and response to risks in the energy sector offers a clear path for enterprise risk management. The integrated system proved to be innovative and effective, making a significant contribution to the improvement of risk management methodology in the energy sector. This research provides valuable information for practical applications in energy and risk management.

Risk quantification and ranking of oil fields and wells facing asphaltene deposition problem using fuzzy TOPSIS coupled with AHP

Asphaltene precipitation and its subsequent deposition always remain a major concern for Oil industry. Formulation of a comprehensive and reliable risk management system for asphaltene prone wells and fields is a challenging task because of the influence of diverse factors. In this study, a decision support system is developed for the asphaltene risk assessment in wells and fields. Since, the data present in the literature is scarce and not consistent, therefore, a hypothetical data of fields and their wells was considered to conduct the study comprehensively. Three hypothetical fields namely; Field A, Field B and Field C were assumed and in each field ten wells were taken into consideration. A decision support system for assessing the risk of asphaltene prone wells was developed using one of the popular and powerful multi-criteria decision making technique i.e. Fuzzy Technique for Order of Preference by Similarity to Ideal Solution (Fuzzy TOPSIS) coupled with Analytic Hierarchy process (AHP). The risk of wells was evaluated using three criteria namely; Detection, Severity and Controls. These criteria were further sub-divided into sub-criteria and their data was assumed. The assumed data was transformed into Triangular fuzzy numbers for calculations. According to the final outcomes, Field A was proved be the most risky field followed by Field B and in the last comes Field C. The outcomes were further validated by other method namely; Fuzzy Complex Proportional Assessment (COPRAS) and all TOPSIS outcomes were found in good relationship with Fuzzy COPRAS. The proposed methodology proposed in this study will be landmark in risk ranking of asphaltene prone wells and fields.

Risk Management and Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange

Purpose: In order to reduce any negative consequences on their performance, it is essential for financial institutions to achieve a balance between risk and return. Organizations with effective risk management practices are more likely to succeed in achieving their operational business objectives. 2013 saw a review of commercial bank laws by the Central Bank of Kenya. As a result of these reviews, certain banks began to experience difficulties with their financial performance. Chase Bank and Imperial Bank, for instance, were placed under receivership in 2015 and 2016, respectively. So the question is, was bad financial management influenced by risk management? This was the impetus behind the study's primary goal, which was to ascertain how risk management and the financial success of banks listed on the NSE interacted. The study's specific goals included figuring out how operational risk management affects financial performance, as well as how liquidity risk management affects financial performance, credit risk management's impact on financial performance, and market risk management's impact on financial performance. Risk management theory, liquidity preference theory, adverse selection theory, and extreme value theory served as the study's guiding principles.
 Methodology: The correlational research approach was used in this study to evaluate these difficulties. The 12 listed commercial banks provided the study with their data. A questionnaire was utilized as the tool for gathering data in this study. To analyze the data, descriptive and inferential statistics were both used. Means and standard deviation were used for descriptive statistics.
 Findings: The output of the study shows that a positive association exists between operational risk management and financial performance. The findings revealed a positive relation between liquidity risk management and financial performance. On the same note, it came out from the output that risk management and financial performance are too positively related. Finally the results showed a positive association between market risk management and financial performance.
 Unique contribution to theory, practice and policy: The study offered the following suggestions. Develop and put into practice a comprehensive operational risk management system that discovers, evaluates, monitors, and controls operational risks. Commercial banks should do the same. The framework needs to match the bank's overall business plan, risk tolerance, and regulatory requirements.

Diversitas Dewan Komisaris dan Pengaruhnya Terhadap Tingkat Pengungkapan Manajemen Risiko Perusahaan

One of the challenges facing the business world today is vulnerability to unwanted risks. For this reason, a comprehensive risk management system is needed to mitigate bad things and increase stakeholder confidence in the company. The leadership structure of Indonesian organizations that adheres to the two-tier concept by separating the roles and responsibilities of Commissioners and directors causes the board of Commissioners and directors to also carry out internal control functions. This leadership structure involves the commissioner's role in terms of risk management disclosure. On the other hand, the issue of diversity in public companies in Indonesia is a factor that affects the complexity of alternative decision-making that affects the disclosure of risk management. This study will examine the effect of diversity of Commissioners such as age, gender, and educational background on the level of disclosure of Corporate Risk Management. This study will take a sample of state-owned companies in Indonesia that are registered as members of the IDX during 2018-2019. This study will use the size of the company as a control variable. The analysis technique used is multiple regression analysis with a significance level of 5%. This study concluded that age diversity had no effect, while gender diversity and educational background diversity of company commissioners had an effect on risk management disclosure. This study shows that in addition to government regulations that have not been fully implemented on risk management disclosure obligations, it also shows that the background of the board of commissioners can affect the level of disclosure of the company's risk management in general. Transparency of risk management information will affect the level of confidence of investors and external stakeholders in the resilience and ability of the company in the face of uncertain situations.

Research on Stress Test of Bank Credit Risk in International Trade Based on DEA Model

International trade financing refers to the sum of all kinds of services provided by banks to meet the capital needs of traders around the capital needs and the laws of capital flow, combined with all aspects of international settlement. As an important part of finance, banking has played a great role in promoting economic and social development. Similarly, economic and social development will also promote the progress and development of banking. With the continuous development of the international economic and financial situation, the potential risks of international trade financing are also growing and changing. Studying the application of stress testing in commercial banks can effectively find the shortcomings of stress testing in commercial banks, which has positive theoretical and practical significance for the docking of management concepts and corporate culture and the construction of a comprehensive risk management system. According to the theory of credit portfolio, this paper puts forward a stress test scheme of bank credit risk in international trade based on DEA, so as to strengthen the management and control of credit risk and ensure the long-term healthy and stable development of banks.

Building an effective personnel risks management system of the organization

The object of this study is a technique to reduce the personnel risks of an organization operating in a developing country under difficult conditions in order to improve the efficiency of staff. The form of ownership of the organization is state-owned, the number of employees is 120 people. The duration of the period for assessing the effectiveness of staff work and monitoring the impact of personnel risks on the organization is 4 weeks. It has been established that the organization has an integrated personnel risk management system. It enables fulfilling an average of 74 % of tasks and is not effective. Given this, an integrated personnel risk management system was developed based on the European approach. For this purpose, using technology transfer, information was obtained on the functioning of an effective personnel risk management system. After that, it was improved taking into consideration the peculiarities of the functioning of the organization when performing tasks. In addition, hard- and soft-skills of personnel were taken into consideration, thus, the complex effect of factors increasing the organization's resilience to personnel risks was taken into account. To implement the personnel risk management system in the organization's activities, a road-map was developed. Duration of implementation – 3 weeks. To assess the effectiveness of an integrated system for combating personnel risks, a comparative method was used for the qualitative and quantitative effectiveness of the tasks of 4 teams of the organization. Two of them worked according to the standard personnel risk management system, and 2 – according to the implemented one. The comparison was performed with the available data on the effectiveness of identical tasks for a period of 4 weeks. It has been established that the implemented comprehensive risk management system is effective, as it provides 100 % fulfillment of tasks under difficult conditions. The developed system can be used to improve the effectiveness of the tasks set for organizations in developing countries.

Credit Risk Management in International Trade Based On the Research of China

International trade is always accompanied by high risks due to its characteristics: complex, involving many counterparties, and time-delay. Among those risks, credit risk is the issue that Chinese foreign trade firms should take into grave account, under the influence of RCEP and Covid-19. This paper will point out the limitations of some foreign trade enterprises through a case study and provides relevant suggestions: building a credit rating system; gaining more information about the counterpart; establishing a comprehensive risk management system. This paper is expected to help foreign trade enterprises manage their credit risks and make preparations for the new period after RCEP comes into effect.

Enabling Legal Risk Management Model for International Corporation with Deep Learning and Self Data Mining.

In uncertain times, risk management is critical in keeping companies from acting rashly and wrongly, allowing them to become more flexible and resilient. International cooperative production project investment and operational risks are different from domestic projects. It has a larger likelihood of occurrence, severe damage ramifications, and greater difficulty in prevention and control. As a result, companies must develop a scientific, logical, and comprehensive risk management system and procedure when “reaching out” to perform international joint production projects. We utilize machine learning (ML) to build a legal risk assessment model for international cooperative production projects, evaluate its validity, divide it into five risk categories, and suggest countermeasures for the risk variables discovered at each risk level in this work. The output of a single classifier is then fused using an SDM (self-organizing data mining) approach at the decision level, resulting in a multiclassifier early-warning model. In the context of the sustainable development goals, this methodology also allows for a sustainability assessment through risk evaluation. The experimental results show that the MCFM-SDM model outperforms a single classifier and other MCFMs in terms of early warning accuracy and stability, confirming the model's use and superiority.

National-scale flood risk assessment using GIS and remote sensing-based hybridized deep neural network and fuzzy analytic hierarchy process models: a case of Bangladesh

Assessing flood risk is challenging due to complex interactions among flood susceptibility, hazard, exposure, and vulnerability parameters. This study presents a novel flood risk assessment framework by utilizing a hybridized deep neural network (DNN) and fuzzy analytic hierarchy process (AHP) models. Bangladesh was selected as a case study region, where limited studies examined flood risk at a national scale. The results exhibited that hybridized DNN and fuzzy AHP models can produce the most accurate flood risk map while comparing among 15 different models. About 20.45% of Bangladesh are at flood risk zones of moderate, high, and very high severity. The northeastern region, as well as areas adjacent to the Ganges–Brahmaputra–Meghna rivers, have high flood damage potential, where a significant number of people were affected during the 2020 flood event. The risk assessment framework developed in this study would help policymakers formulate a comprehensive flood risk management system.

Cybercrime, cybersecurity and water utilities

ABSTRACT A total of 20 known cases of cybercrime attacks on water utilities have been seen in five countries between 2000 and 2021, with a steady increase in their frequency. The actual number of cyberattacks is higher, with 40 recorded in the United States in 2014–15. It is chiefly driven by organized crime and hostile state actors, along with disgruntled former employees. Vulnerabilities occur because of utilities adopting supervisory control and data acquisition (SCADA) systems without appropriate cybersecurity measures along with staff who have properly trained to be aware of phishing attacks. Threats such as these highlight the need for water utilities to have a comprehensive risk management system in operation.

GRAVITAS: Graphical Reticulated Attack Vectors for Internet-of-Things Aggregate Security

Internet-of-Things (IoT) and cyber-physical systems (CPSs) may consist of thousands of devices connected in a complex network topology. The diversity and complexity of these components present an enormous attack surface, allowing an adversary to exploit security vulnerabilities of different devices to execute a potent attack. Though significant efforts have been made to improve the security of individual devices in these systems, little attention has been paid to security at the aggregate level. In this article, we describe a comprehensive risk management system, called GRAVITAS, for IoT/CPS that can identify undiscovered attack vectors and optimize the placement of defenses within the system for optimal performance and cost. While existing risk management systems consider only known attacks, our model employs a machine learning approach to extrapolate undiscovered exploits, enabling us to identify attacks overlooked by manual penetration testing (pen-testing). The model is flexible enough to analyze practically any IoT/CPS and provide the system administrator with a concrete list of suggested defenses that can reduce system vulnerability at optimal cost. GRAVITAS can be employed by governments, companies, and system administrators to design secure IoT/CPS at scale, providing a quantitative measure of security and efficiency in a world where IoT/CPS devices will soon be ubiquitous.

Risk Assessment in Energy Infrastructure Installations by Horizontal Directional Drilling Using Machine Learning

Nowadays we can observe a growing demand for installations of new gas pipelines in Europe. A large number of them are installed using trenchless Horizontal Directional Drilling (HDD) technology. The aim of this work was to develop and compare new machine learning models dedicated for risk assessment in HDD projects. The data from 133 HDD projects from eight countries of the world were gathered, profiled, and preprocessed. Three machine learning models, logistic regression, random forests, and Artificial Neural Network (ANN), were developed to predict the overall HDD project outcome (failure free installation or installation likely to fail), and the occurrence of identified unwanted events. The best performance in terms of recall and accuracy was achieved for the developed ANN model, which proved to be efficient, fast and robust in predicting risks in HDD projects. Machine learning applications in the proposed models enabled eliminating the involvement of a group of experts in the risk assessment process and therefore significantly lower the costs associated with the risk assessment process. Future research may be oriented towards developing a comprehensive risk management system, which will enable dynamic risk assessment taking into account various combinations of risk mitigation actions.

Risk analysis of natural gas transportation processes

The problem of ensuring technological reliability and environmental friendliness of the natural gas transportation process, the main approaches to risk assessment and management at industrial facilities are considered. To increase the trouble-free operation of the gas transmission system, a comprehensive risk management system is proposed. The research of an ecological condition of the ground layer of air is being done in Bogorodchany district based on the constructed maps, which represent a distribution of harmful matters concentrations, its coefficients and also the coefficients of ecological danger and the map of a total contaminating index. The general chart of ecological risk is represented. Analysis of objects for gas transportation is made. The method of area detonating calculation and distance of mixture explosive cloud distribution is considered during the damage at the main gas pipeline. Area detonating calculations and the distance of mixture explosive cloud distribution are conducted at different wind speeds.

An Overview of the Covid-19 Crisis Management in Cameroon: Decentralised Governance Response Needed


 This article provides insights into Cameroon’s crisis management of the coronavirus pandemic via an exploratory and descriptive qualitative research. Thematic analysis of data was done using a framework approach; the Comprehensive Pandemic Risk Management System (CPRMS) underpins the research and provided structure, order, and clarity to the article. From the findings, one can deduce that the government is working hard to mitigate the potentially awful consequences of the coronavirus pandemic. The authorities implemented temporary containment and infection control measures to stem virus spread and have relied heavily on international and humanitarian organisations for financial/technical help to operationalise the pandemic response. Attempts to control the spread of the virus, however, have been challenging. Deficiencies abound in many areas including slowness to institute containment measures after the first infected cases; Cameroon’s fragile/weak health infrastructure; insufficient critical care units and health workers disproportionately distributed in the country; safety concerns with insufficient protective equipment for health workers; overly centralised pandemic response at the national level to the detriment of the regions and lower administrative units; government politicising the response by refusing contributions/donations from opposition parties; high cost for COVID-19 treatment limiting access to healthcare and insufficient trust in health systems ability to deal with COVID-19. Recommendations are supplied on how to improve the coronavirus response as infections skyrocket. The recommendations also address enhancing later epidemics/pandemics and Cameroon’s health system.

Risk Management of Industrial Investment Fund in Marine Economic Zone: An Investor Protection Based Study

Wang, X. and Dai, S.-F., 2020. Risk management of industrial investment fund in marine economic zone: An investor protection based study. In: Qiu, Y.; Zhu, H., and Fang, X. (eds.), Current Advancements in Marine and Coastal Research for Technological and Sociological Applications. Journal of Coastal Research, Special Issue No. 107, pp. 33-36. Coconut Creek (Florida), ISSN 0749-0208.The 21st century is the era of marine economy, and the exploitation of marine resources has been widely valued by all countries in the world. Therefore, the marine economy has gradually become an industrial cluster, which has become an important growth point for the development of a country. With the construction of Marine Economic Zone, marine industry investment fund has become an important way of investment industry. However, the development of China's industrial investment fund started late, which caused many problems, such as different scale, low industry maturity and so on. Therefore, there will be many risks in the industrial investment fund of China's marine economic zone. Based on the perspective of investor protection, this paper analyzes the risk management of investment funds in financial practice, which will form a mature system of financial institutions. However, China's marine economic zone has not yet established a comprehensive risk management system, which is a low awareness of investors' risk management. Therefore, this paper analyzes the necessity of the industrial investment fund in the marine economic zone. Then, this paper analyzes the investment fund management mode of the marine economic zone. Finally, this paper puts forward suggestions and measures.

ХЕДЖУВАННЯ ЦІНОВОГО РИЗИКУ ЗА ДОПОМОГОЮ ОПЦІОНІВ У МЕЖАХ МІЖНАРОДНОЇ ТОРГІВЛІ СИРОВИННИМИ ПРОДОВОЛЬЧИМИ ТОВАРАМИ

The focus of this article is an employment of option contracts by economic agents when hedging a price risk in international trade of agriculture and food commodities. Despite a serious downturn in the world economy accompanied with major logistics and global value chains disruptions caused by Coronavirus disease in 2020, international agri-food trade demonstrates a sustainable growth supported by a constantly waxing demand due to continuous increase in population and improvement in living standards as well as a higher supply due to modern technological progress. It therefore implies that a comprehensive price risk management system should be introduced to avoid or minimize market participants’ exposure to potentially adverse future events. The article is devoted to the study of the key advantages of using options as an integrated element within such a system. Comparative analysis of future and option contracts is conducted to better understand their respective application depending on a risk profile of an event. The economic nature of options is presented from the perspective of a concept of price insurance that provides for an existence of a certain risk premium determined by market forces which is paid by economic agents to obtain such a price guarantee. Fundamental characteristics of an option contract as a financial derivative, its types and features, reason of usage according to the goals that economic agents, including e.g., powerful multinational enterprises (MNE), try to achieve depending on their specific market position are described. The article explains situations of economic agents, both producers and processors of agricultural commodities on the one hand (acting as hedgers) and speculators one the other hand (acting as such), being naturally long or naturally short as well as respective tactics based on options they adhere to with the aim of protecting their positions against unfavorable moves in market prices. Thus, the fact it refers to real scenarios of using options as price risk hedging tools which international traders can utilize when moving agricultural and food commodities globally, reinforces opinion that this article is of a significant practical importance.

Regulation and Risk Assessment of Payment Systems

The study reveals features of the risk management in the payment system, taking into account the requirements of the Bank of Russia. Particular emphasis is placed on the implementation of practical aspects of organizing risk management systems in conformity with Bank of Russia Regulation No. 607-P dated 03.10.2017 “On requirements for the procedure for ensuring the smooth functioning of the payment system, indicators of the smooth functioning of the payment system and methods of risk analysis in the payment system including risk profiles”. The research uses international standards and approaches to the practical construction of risk management systems. The research suggests methodological recommendations for the construction of a comprehensive risk management system in the payment system. The results of the study can be used in the practical implementation of the Bank of Russia’s approaches to ensuring the smooth functioning of payment systems.

The tax risk management system conceptualization: strategic goals and directions of reforming the State Tax Service of Ukraine

The article is devoted to actual issues of the State Tax Service of Ukraine reforming for creation a comprehensive tax risk management system in view of the basics of risk theory, risk management standards, global trends and specific features of domestic tax administration. The article focuses on the concretization of specific areas of work with tax risks, taking into account the expert evaluation by the TADAT methodology. The strategic approaches of tax authorities to increase the level of compliance by taxpayers with tax rules, as well as the interdependence of instruments to counteract of the tax risks are presented. It is proved that the differential approach application requires the creation and functioning of tax risk monitoring, the level of taxpayer risk determining, as well as a high level of communication with taxpayers to minimize tax risks in order to be able to minimize the number of tax violations through non-audit measures and service functions. The ways of responding to the risks of non-compliance with tax legislation are defined. Performed analysis of relevant indicators for key areas of tax risk management performance assessing allowed determining the priority directions for integrated tax risk management system development regarding non-compliance by taxpayers with tax legislation in the State tax service of Ukraine activity in accordance with modern international best practice. It is noted that the level and effectiveness of tax risk management largely depends on the level of analytical work and provides for identification stages, analysis, evaluation (measurement), and ranking. Recommendations for the TADAT assessment are presented, which indicate that the main steps for working with risk information are: environmental testing, analysis of audit data, third-party data, taxpayer behavior, cross-border trade research on the application of tax evasion schemes, the shadow economy.