Contemporary Risk Management Research Articles

Innovations in Risk Measurement and Management for Strategic Financing Decisions

This study aims to explore the integration of innovative quantitative models, behavioral finance insights, and advanced analytics techniques in contemporary risk management practices to bolster organizations' resilience and informed decision-making within dynamic financial landscapes. Through a systematic literature review spanning disciplines such as finance, psychology, and technology, this research synthesizes diverse insights to comprehensively understand the evolving nature of risk management strategies. The findings elucidate that incorporating advanced quantitative models like Value at Risk (VaR) and Conditional Value at Risk (CVaR) empowers organizations to meticulously assess and quantify financial risks, thereby enhancing risk management accuracy and granularity. Furthermore, the assimilation of behavioral finance insights illuminates the psychological determinants shaping risk perception and decision-making behaviors, leading to the development of more robust risk management frameworks that accommodate both rational and irrational factors. Moreover, leveraging advanced analytics techniques, notably natural language processing (NLP) algorithms, enables proactive risk management by analyzing textual data and market sentiments with heightened precision. This study underscores the imperative of perpetual innovation and adaptability in risk management practices to adeptly navigate the intricacies of modern financial landscapes. By harnessing emerging technologies, behavioral insights, and interdisciplinary methodologies, organizations can fortify their risk management capabilities, mitigate threats, and seize opportunities in today's globally interconnected economy. Addressing the challenges associated with implementing innovative risk management practices necessitates proactive leadership, resource allocation, and organizational culture transformation. Ultimately, this research contributes to advancing the understanding and application of innovative risk measurement and management approaches, fostering sustainable growth and success for organizations.

The potential of different NBS policies to provide water flow regulation: a scenario-based assessment based on SWMM

The potential of different NBS policies to provide water flow regulation: a scenario-based assessment based on SWMM

Applicability of Indigenous knowledge and methods in flood risk management in a nigerian city

The incidence of flooding is set to rise due to climate impacts in the coming years. Nigeria is one of the countries increasingly experiencing flooding. Its urban areas are expected to suffer more from the impacts of flooding due to the concentration of economic activities therein and projected population growth. To sustainably manage flood risks, there is a growing call to incorporate indigenous knowledge and practices in contemporary flood risk management. This work engaged with experts working in the field of flood risk management in public institutions to understand if indigenous knowledge and methods could positively inform modern flood risk management in Port Harcourt, a major flood prone Nigerian city. It finds that the applicability of indigenous knowledge in contemporary flood management in the research location is limited given the poorly managed transformation, growth, and evolution the city has experienced over time. However, some practice rooted in Indigenous knowledge and practices like planting of certain trees and mangrove species still have utility today. The government is encouraged to halt reclamations and conversions of wetlands and instead, seek ways of restoring and bringing back these important ecosystems given their natural role in flood mitigation and control. Developing urban forests can also play an integral role in managing rainwater runoff while improving the overall environmental quality.

Linking human perception and scientific coastal flood risk assessment (Anlo Beach Community, Ghana)

Policymakers concerned with coastal management issues have recently focused their efforts on how people perceive flood risk. Understanding the public's perception of risk has become an essential component of contemporary flood risk management, as it provides a basis for designing practical and effective flood mitigation strategies. This study was conducted in Anlo Beach, one of the most vulnerable coastal communities in Ghana. It investigated household perceptions of flood risk and examined them against independent physical measures that assess exposure. In parallel, multivariate regression analysis was conducted to identify and establish the key factors influencing household perceptions of flood risk in the study area. The results showed that two variables, previous flood experience (data collected through the social survey) and factual exposure (assessed through GIS measurements), played an important role in determining the level of flood risk reported by households. In particular, the relationship between previous flooding experience and perceived level of coastal flood risk was both positive and statistically significant. Socio-demographic factors did not have a significant influence on risk reporting. We conclude that perception variables collected through social surveys can be used as proxy indicators of environmental risks when physical measures are not available. Biases based on the socio-economic status of respondents may exist, but they do not outweigh information derived from people's factual relationships with the environment. Further studies on the above factors would support flood risk reduction measures in the study area and West Africa, particularly in light of climate change.

Approach to Contemporary Risk Assessment, Prevention and Management of Thrombotic Complications in Multiple Myeloma.

Multiple myeloma (MM) is associated with an increased risk of thrombotic complications, which remains substantial despite the implementation of thromboprophylaxis. The procoagulant state that characterizes the disease is multifactorial, and a greater understanding of the underlying pathophysiology is required to inform appropriate thrombosis prevention. Currently, there is a shift towards using direct oral anticoagulants (DOACs) in this setting; head-to-head comparisons in the context of controlled clinical trials between class agents are still missing. MM-specific VTE risk assessment scores have been developed to optimize management and minimize the associated mortality/morbidity. Their clinical utility remains to be evaluated. The value of adding biomarkers to clinical scores to optimize their performance and increase their discriminatory power is also under assessment.

A New Approach to Risk Management in the Power Industry Based on Systems Theory

Contemporary risk management is based on statistical analysis. Such an approach has a few crucial disadvantages. First of all, it has limited applicability to new technological solutions. In this paper, a new idea for risk evaluation and management is put forward. The proposed approach is based on the autonomous systems theory. The theoretical foundation of the proposed idea is described and its prospective applications are discussed. The proposed measures of risk are based on the idea of the controllability of the system—the greater the level of controllability, the lower the risk. Various aspects of controllability are analyzed—economic, technological, and industrial. For each aspect of controllability, the problem of defining adequate measures for the level of risk is discussed. The proposed approach allows the risk assessor to analyze the system deeply. As a consequence, the analyst can assess the risk based not only on a posteriori statistics but also on an analysis of the crucial properties of the system. This allows the investigator to predict a priori possibilities of critical events. The proposed methodology is applied to the power industry.

Review of Contemporary Risk Management Challenges in the Treatment of Patients With Borderline Personality Disorder.

Standard psychiatric risk management challenges are routinely amplified in the treatment of patients with primary or co-occurring borderline personality disorder diagnosis. Most psychiatrists receive limited guidance during training or as part of continuing medical education about specific risk management concerns in work with this patient population; nevertheless, these concerns can occupy a disproportionate amount of time and energy in clinical practice. The goal of this article is to review the frequently observed risk management quandaries encountered in work with this patient population. The more familiar risk management dilemmas related to management of suicidality, potential boundary violations, and patient abandonment, are considered. In addition, salient contemporary trends in prescribing, hospitalization, training, diagnostic classification, models of psychotherapeutic treatment, and use of emerging technologies in provision of care, are explored in terms of their impact on risk management.

The evolution of risk management

The aim of this paper is to present the evolution of approaches towards risk management, starting from the beginnings of this field and ending with modern times. The article provides an overview on the applied approaches towards risk management. It allows to understand the basics of contemporary risk management concepts in enterprises and can provide guidance for further research on risk. The author analyzes in detail the change in approaches towards risk management over the years, focusing in particular on traditional, silo risk management and on the most modern concept—ERM, currently considered the most mature and the most perfect, proactive approach towards risk management in an enterprise. Silo risk management treats individual risks independently and focuses on minimizing risk exposure, while the essence of ERM is the integrated management of all risks to which the organization is exposed and the inclusion of risk management in the organization’s strategy.

Risky Business

The Securities Act of 1933 is tied to transactions in securities, rather than the risk of those securities, an approach that reflects the risk management of the times. Managing risk through diversification did not occur until twenty years later, and a further twenty years passed before new instruments were created to facilitate the transfer of discrete portions of financial risk. For much of the capital markets, this shift resulted in a separation between the risk associated with individual securities and the securities themselves. The idiosyncratic risk of individual securities now matters less than its impact on a portfolio’s total risk. 
 In response, SEC disclosure requirements increasingly have facilitated cross-company comparisons and portfolio-level investment decisions. Nevertheless, the growing separation between risk and the instruments evidencing that risk, and the ability today to manage and transfer risk by itself, prompts a question: Should we begin reconsidering the Securities Act’s approach to regulation, moving from requirements tied to transactions in securities towards requirements that reflect the management and transfer of risk? 
 There is certainly merit to doing so, but we may be limited by the practical difficulty of tracing risk in today’s capital markets. For now, regulation’s practical reach may fall short of contemporary investment and risk management strategies. While regulatory responses are possible, there is likely to continue to be a tension between the requirements of the Securities Act and the risk-based approach to investing taken by institutions whose investments comprise most of the transactions subject to the Securities Act.

Sports Injury Risks and Opportunity Costs: The Conspicuous Landscape of Handball among Tertiary Teachers’ Colleges in Zimbabwe

This study explored injury risks associated with sport participation among handball players in Zimbabwean Tertiary Institutions between 2016 and 2019. The study employed a descriptive, prospective cohort design anchored on quantitative methodology and informed by Positivism Philosophy. The population comprised technocrats (coaches, fitness trainers, physiotherapists, psychologists and players) from selected Zimbabwe Teachers’ Colleges Sports Association handball teams. Stratified random sampling was used to select the respondents. Questionnaire was used as data collection tool and IBM SPSS Statistic Version 23 was used for data analysis. Findings revealed critical knowledge-service gaps on sports medicine professionals regarding lack of players’ informational sources on pre-participation medical health-checks as evidence-based practices for addressing activity limitations and risks upon return-to-sport. Ego-oriented administration characteristic of pain-injury paradox environment prevailed with pre-mature ending of players’ rehabilitation routes. Well formulated guideline-inclined preventive injury risk management protocols resonating player-centered medicine approaches that could effectively abate epidemiologic opportunity injury risks and costs were non-existent. Furthermore, regularized in-service professional development clinics lacked. Players’ objective injury records, profiles and pre-participation medical examination health-checks should be considered as critical informational sources for fully resolving physiological defects prior to return-to competitive contexts. Formulation of guideline-inclined preventive injury risk management protocols entrenching player-centered medicine practices could effectively trim down epidemiologic opportunity injury risks and costs and improve the critical base for players’ odds of participation. Regularized in-service professional development trainings for sports medicine professionals through symposiums should inexorably be an esteemed epitomic pedestal delved towards improving their expert base levels in view of contemporary preventive and injury risk management dynamics in sports.

Tactical Risk Analysis in Emerging Markets in the Wake of the 2007-2009 Credit Crunch

The attempt of this paper is to fill a gap in contemporary risk management literature and especially from the perspective of emerging markets in light of the aftermaths of the most recent sub-prime global financial crisis. This paper develops a rigorous approach for the assessment of risk exposure under extreme conditions.

RISK ASSESSMENT FOR VIOLATION OF ANTI-TRUST LEGISLATION BY STATE EXECUTIVE AUTHORITIES

The article deals with a problem of building an anti-trust compliance system in state executive authorities from the point of view of contemporary risk management. The authors expound a well-known instrument based on the bow-tie diagram construction which successfully helps to develop effective measures to prevent violation of anti-trust legislation cases by state executive authorities. They also give some numeric results of statistical modelling of anti-trust legislation violation risks by state executive authorities by means of the Monte-Carlo method.

Çağdaş Risk Yönetimi Standartları Çerçevesinde Sanayi İşletmelerinde Risk Yönetimi Algısı Üzerine Bir Araştırma (A Research on Risk Management Perception in Industrial Enterprises within the Framework of Contemporary Risk Management Standards)

Purpose – The aim of the research is to measure the current risk management perceptions of industrial enterprises in order to guide them to create an effective risk management system in line with contemporary risk management standards. Design/methodology/approach – The research data were collected through a survey from 30 large industrial enterprises operating in the province of Kutahya, contributing to the city economy in terms of employment numbers, closed area size, turnover and export volume. The data were analyzed with SPSS 21 statistical program. Findings – As a result of the research, it was seen that the personal attitudes of business managers against risks are in the form of a “risk-free” perspective. Addition to that, it has been concluded that there is a traditional understanding that businesses predominantly perceive and manage financial risks. The findings have proved that the modern risk management understanding is not perceived in industrial enterprises and that the risk management has not reached a certain level of maturity yet. Discussion – It is an important issue for the effectiveness of the system to determine the perceptions they develop against risks before establishing a risk management system in contemporary standards. Without measuring the current risk and risk management perception in businesses, any risk management system will create serious deficiencies at the beginning. In this sense, with the scale developed in the study, it is expected that the managers of industrial enterprises will determine how they perceive contemporary risks and contribute to their businesses in reviewing and developing existing risk management systems.

From hubris to humility: Transcending original sin in managing hydroclimatic risk

Abstract The characteristics of hydroclimatic risk in the 21st Century are rapidly changing. Increases in extreme weather events and population densities alter exposure to floods and droughts. Water infrastructure is unable to keep pace and deterministic models can mislead. Yet, predominant strategies for managing risk continue to follow historical precedent, striving to tame nature's outbursts and mitigate disasters through conventional engineering structures. In this Viewpoint article, scholars from three disciplines address underlying limitations in contemporary risk management, each of which is rooted in the concept of hubris. They argue that effective risk management must extend beyond hubris-thinking to an approach based on humility. Extending from the three types of limitations—described as Disconnect from Nature, Engineers of a Fixed Nature. and Modelers of Nature— a collective and synthetic consideration provides insights into potential pathways forward for both science and practice. More satisfactory strategies for managing hydroclimatic risk will require a shift from a hubris-based paradigm to a more humility-based approach.

Past eruptions and future predictions: Analyzing ancient responses to Mount Vesuvius for use in modern risk management

The Campania region of southern Italy, dominated by Mount Vesuvius, is an enduring volcanic landscape which hosts a wealth of detailed information about human responses to past eruptions. This research taps into rich archaeological, geological, and historical data to bring together the past, present and future of Mount Vesuvius and the populations surrounding it. Records from the Avellino eruption (ca. 1900 BCE), and the Pompeii eruption (79 CE), their impacts, and associated social responses are examined here as two of the largest, most violent events of Vesuvius' eruptive history which impacted human populations. The social impacts of these eruptions are considered as valuable sources of information about worst-case-scenario events which should be utilized in contemporary risk management and emergency planning. The vulnerability and resilience of the Early Bronze Age and Roman societies who experienced the Avellino and Pompeii eruptions, respectively, are contrasted with potential responses of present Campanian communities to a hypothetical future eruption scenario. This work thus makes use of archaeological data from past disasters to engage with contemporary issues of emergency planning and risk management in the Vesuvius region of Southern Italy.

Controlling risks to ensure financial stability and reducing volatility

AbstractThe 11th International Risk Management Conference was held at the University of Paris‐Dauphine and the EM LYON Business School (Paris Campus) in June 2018. The conference theme “1968–2018: From Z‐Score to Contemporary Risk Management, 50 Years of Risk Measurement and Management” was selected as a means to showcase the many ways that financial risk measurement has evolved and impacted financial risk management in banks and corporations as well as the tools used by asset managers and market regulators. The four papers included in this special issue of the Journal of International Financial Management and Accounting focus on a wide range of issues: How small differences in credit ratings effect the speed of adjustment in corporate leverage, the impact of using soft variables to assess default probabilities in European corporations, a new approach to measuring a company's intrinsic risk, and the effectiveness of short sale circuit breaker rules to limit stock price volatility. Our Foreword highlights the main findings of these papers and offers our assessment of the lessons they provide for financial managers and policymakers.

Balancing Dignity and Utility of Privacy and Information Sharing in the Digital Big Data Age as Corporate Risk and Sustainability Management

Sustainability management has originally and – to this day – primarily been focused on environmental aspects. Today enormous data storage capacities and computational power in the e-big data era have created unforeseen opportunities for big data hoarding corporations to reap hidden benefits from individuals' information sharing, which occurs bit by bit in small tranches over time. This paper presents a novel angel of sustainability, which is concerned with sensitive data protection given the recently detected trade-off predicament between privacy and information sharing in the digital big data age. When individual decision makers face the privacy versus information sharing predicament in their corporate leadership, dignity and utility considerations could influence risk management and sustainability operations. Yet to this day, there has not been a clear connection between dignity and utility of privacy and information sharing as risk management and sustainability drivers. The chapter unravels the legal foundations of dignity in privacy but also the behavioral economics of utility in communication and information sharing in order to draw a case of dignity and utility to be integrated into contemporary corporate governance, risk management and sustainability considerations of e-innovation.

Stakeholder evaluations of risk interventions for non-potable recycled water schemes: A case study

Non-potable recycled water schemes can benefit sustainable urban water management through reducing demand for drinking water and mitigating environmental loadings through the provision of advanced wastewater treatment. However, scheme feasibility can be diminished by high capital and operating costs which can be elevated by perceptions of health risks and subsequently overly cautious risk reduction measures. Conversely, a failure to anticipate the risk management expectations of stakeholders can undermine scheme feasibility through insufficient demand for recycled water. The aim of this study was to explore how stakeholders' perceptions and preferences for risk management and recycled water end-uses might influence scheme design. Using a case study scheme in London, four risk management intervention scenarios and six alternative end uses were evaluated using a stochastic PROMETHEE-based method that incorporated quantitative microbial risk assessment and stakeholder criteria weights together with an attitudinal survey of stakeholders' risk perceptions. Through pair-wise criteria judgements, results showed that stakeholders prioritised health risk reductions which led to the more conservative management intervention of adding water treatment processes being ranked the highest. In contrast, responses to the attitudinal survey indicated that the stakeholders favoured maintaining the case study's existing levels of risk control but with more stakeholder engagement. The findings highlighted potential benefits of understanding risk perceptions associated with different design options and contrasting these with multi-criteria model results. Extrapolating from these findings, future research could explore potential challenges and benefits of providing flexibility in scheme designs to appeal to a wider range of stakeholder needs as well as being more adaptable to future social, environmental or economic challenges. The study concludes that contemporary risk management guidance would benefit from more explicitly outlining constructive ways to engage stakeholders in scheme evaluation.

Quantifying Flood Vulnerability Reduction via Private Precaution

AbstractPrivate precaution is an important component in contemporary flood risk management and climate adaptation. However, quantitative knowledge about vulnerability reduction via private precautionary measures is scarce and their effects are hardly considered in loss modeling and risk assessments. However, this is a prerequisite to enable temporally dynamic flood damage and risk modeling, and thus the evaluation of risk management and adaptation strategies. To quantify the average reduction in vulnerability of residential buildings via private precaution empirical vulnerability data (n = 948) is used. Households with and without precautionary measures undertaken before the flood event are classified into treatment and nontreatment groups and matched. Postmatching regression is used to quantify the treatment effect. Additionally, we test state‐of‐the‐art flood loss models regarding their capability to capture this difference in vulnerability. The estimated average treatment effect of implementing private precaution is between 11 and 15 thousand EUR per household, confirming the significant effectiveness of private precautionary measures in reducing flood vulnerability. From all tested flood loss models, the expert Bayesian network‐based model BN‐FLEMOps and the rule‐based loss model FLEMOps perform best in capturing the difference in vulnerability due to private precaution. Thus, the use of such loss models is suggested for flood risk assessments to effectively support evaluations and decision making for adaptable flood risk management.

Towards a Utility Theory of Privacy and Information Sharing

Sustainability management has originally and—to this day—primarily been focused on environmental aspects. Today, enormous data storage capacities and computational power in the e-big data era have created unforeseen opportunities for big data hoarding corporations to reap hidden benefits from an individual's information sharing, which occurs bit by bit over time. This article presents a novel angle of sustainability, which is concerned with sensitive data protection given by the recently detected trade-off predicament between privacy and information sharing in the digital big data age. When individual decision makers face the privacy versus information sharing predicament in their corporate leadership, dignity and utility considerations could influence risk management and sustainability operations. Yet, to this day, there has not been a clear connection between dignity and utility of privacy and information sharing as risk management and sustainability drivers. The chapter unravels the legal foundations of dignity in privacy but also the behavioral economics of utility in communication and information sharing in order to draw a case of dignity and utility to be integrated into contemporary corporate governance, risk management and sustainability considerations of e-innovation.