Risk Management Framework Research Articles

Risk Management Strategy for International Investment Projects of an Innovative Enterprise in the Context of Industry 4.0

"The significance of risk management within the framework of Industry 4.0 is on the rise, particularly within the realm of international investment projects. Contemporary technological advancements, such as artificial intelligence and blockchain, are not only ushering in fresh prospects but are also instigating the emergence of novel categories of risks. The primary objective of this investigation is to formulate an all-encompassing strategic risk management framework tailored to innovative enterprises operating within the purview of Industry 4.0. The envisaged research endeavour encompasses a thorough scrutiny of existing methodologies and models, along with an exploration of contentious dimensions within this domain. The study’s findings encompass criteria for the evaluation and quantification of risks, in addition to pivotal risk factors that exert notable influence on the efficacy of international investment projects. The pragmatic import of this investigation resides in its potential utility for enhancing managerial decisionmaking across various tiers of the organizational hierarchy. The presented material seeks to facilitate the alignment of conventional risk management approaches with the intricacies inherent in Industry 4.0. Nonetheless, it is imperative to acknowledge that the efficacy of the formulated model may hinge upon contextual nuances and might necessitate supplementary adaptations."

Assessment of Risks for a New Food Processing Facility Using the ISO 31000 Risk Management Framework and ALARP Principle

Risk analizi ve yönetimi, işletmelerin karşılaşabilecekleri olası tehlikeleri belirleyerek bu risklere etkin bir şekilde yanıt verme sürecidir. Risk analizi ve yönetimi, organizasyonların daha iyi kararlar vermesini, operasyonel verimliliği artırmasını ve kriz durumlarına hazırlıklı olmasını sağlar. Ayrıca, risklerin önceden belirlenmesi ve uygun önlemlerin alınması, finansal kayıpların azaltılmasına ve itibarın korunmasına yardımcı olur. Aynı zamanda, kriz durumlarına hazırlıklı olmayı ve itibarın korunmasını sağlar. Bu süreç, riskleri tanımlama, analiz etme, önceliklendirme ve uygun önlemleri alma adımlarını içerir. Risk analizi, organizasyonun faaliyetleri ve hedefleri dikkate alınarak potansiyel tehlikelerin belirlenmesini sağlar. Ardından, riskler önceliklendirilerek en yüksek önceliğe sahip olanlara öncelik verilir ve riskleri azaltmak veya ortadan kaldırmak için uygun önlemler alınır. Bu çalışmada yeni bir gıda işleme tesisi için risk analizi uygulaması gerçekleştirilmiştir. Bu kapsamda tesisin karşılaşması muhtemel riskler belirlemiştir. Belirlenen riskler iş sağlığı ve güvenliği açısından olabileceği gibi yeni bir tesis üzerine çalışılması sebebiyle sektörden kaynaklanan riskler de olabilir. Çalışma kapsamında literatürde bulunan çeşitli risk değerlendirme yöntemlerine başvurulmuştur ve elde edilen sonuçlar ile hedeflendiği gibi risklerin yönetilmesi sağlanmıştır.

Blockchain-based multi-organizational cyber risk management framework for collaborative environments

Blockchain-based multi-organizational cyber risk management framework for collaborative environments

Risk management practice for foreign banks in the Chinese financial sector: a case study of HSBC China

This dissertation uses a single case study approach with a mix of qualitative and quantitative analysis of secondary data for research process. It aims to answer the research questions of how does risk management framework of foreign banks work in China’s regulatory and economic environment. Through an in-depth analysis of the risk management practice of HSBC Bank (China) in 5 years period, the author finds risk management policies and assessment procedures are always align with organization’s risk appetite and strategy. In addition, based about HSBC, the portfolio with higher capital requirement has lower return due to the extra cost. And there is no clear evidence that stricter supervisions will impact the efficiency of risk management.

Charting the complexities of a post-COVID energy transition: emerging research frontiers for a sustainable future

This paper delves into the implications of the global COVID-19 pandemic for the low-carbon transition in the post-pandemic era. The pandemic’s repercussions on global economies and societies have been extensive, characterized by uncertainty, economic slowdown, and disruptions in global supply chains and trade. Furthermore, it has unveiled vulnerabilities within energy and economic structures, underscoring the intrinsic link between public health, the environment, and the socioeconomic and political dimensions. Within this framework, this perspective pinpoints critical strands of research necessitating further exploration in the post-COVID energy transition landscape. These areas encompass the need for long-term scenarios, the influence of political dynamics on coordinated climate initiatives, the worldwide adoption of renewable energy technologies, the social and economic repercussions of energy transition policies on marginalized communities, the development of innovative financial mechanisms to bolster sustainable initiatives, and the influence of societal attitudes, behaviors, and culture on the adoption of renewable energy technologies. The analysis emphasizes the essential roles of resilient energy systems, climate policies, risk management frameworks, and sustainable finance in constructing a resilient and sustainable future. Finally, the paper underscores the significance of interdisciplinary collaboration and an all-encompassing strategy to tackle the challenges posed by the post-COVID energy transition effectively.

Internal Audit Quality In North Sumatra Government

This study explores the concept of internal audit quality within the context of the North Sumatra Government. The focus is on understanding the factors influencing and contributing to the effectiveness and reliability of internal audit practices in the region. Through a quantitative research approach, data is collected to analyze the key components of internal audit quality and their impact on organizational governance. The study employs a survey methodology, distributing questionnaires to internal auditors, management, and other stakeholders involved in the internal audit processes of North Sumatra Government agencies. The research investigates factors such as adherence to professional standards, competency of internal auditors, independence, and the effectiveness of communication within the internal audit function. Preliminary findings indicate a correlation between internal audit quality and the overall governance and risk management framework within the North Sumatra Government. The study contributes to the existing body of knowledge by providing insights into the specific dynamics and challenges faced by internal audit functions in the public sector. The implications of this research extend to government officials, policymakers, and internal audit practitioners, offering recommendations for enhancing internal audit quality to strengthen accountability, transparency, and organizational performance within the North Sumatra Government. The results aim to inform decision-makers and contribute to the continuous improvement of internal audit practices in the regional public sector.

The Role of Financial Services in the Transition to a Sustainable Economy

The financial services industry plays a critical role in the transition to a sustainable economy. Financial institutions can allocate resources to more environmentally friendly endeavors, manage long-term sustainability risks, and provide financing for sustainable projects.
 One way that financial institutions can support the transition to a sustainable economy is by allocating capital to more environmentally friendly investments. This could include investing in renewable energy, sustainable agriculture, and green buildings. Financial institutions can also help to manage long-term sustainability risks by developing and implementing climate risk management frameworks. This will help to protect investors and financial markets from the potential financial impacts of climate change.
 Finally, financial institutions can provide financing for sustainable projects through a variety of mechanisms, such as green bonds and sustainable loans. This financing can help to accelerate the deployment of clean technologies and other sustainable solutions.

Research on Risk Assessment of Internet Finance

Internet finance integrates online transaction data generated in different social networks, and completes credit consumption, loans and other lending behaviors by means of electronic payment through the research and judgment of customer credit, so that people can enjoy financial services while dealing with various problems. This paper takes Internet finance as the research object, analyzes it as a whole business form, and adopts a comprehensive evaluation method different from the traditional single factor analysis method, organically combines hierarchical analysis and fuzzy mathematics, effectively considers different types of risks in Internet finance, and adopts corresponding grade classification, so as to avoid too thin and idealized research. The results of empirical research show that China's Internet finance is generally in a state of high risk. Among these risk factors affecting Internet finance, the impact of network security is particularly prominent. This paper constructs the framework of risk management from the perspective of six first-level indicators, and puts forward corresponding suggestions and solutions.

Discussion on the Enterprise Financial Risk Management Framework Based on AI Fintech

Deep learning algorithms lack interpretability and interpretability in the decision-making process. This makes it difficult to understand the judgment basis and decision-making process of financial risks based on algorithms, which may reduce the trust and acceptance of risk decisions by enterprises. To address this issue, this study introduces the improved random forest algorithm based on the decision tree algorithm to discuss its framework. Through analysis of the PR curve in the experiment, it was determined that the AP value of the enhanced random forest algorithm is 0.9919, a significant improvement over the RF algorithm's previous value of 0.9237. It also has a good balance between the precision rate and the recall rate. By introducing the data set to compare and analyze the three algorithms of SVM, CRAT, and the improved random forest algorithm, it is found that the improved random forest algorithm has a higher test value. Through cluster analysis, it is found that the clustering accuracy of the improved random forest algorithm is about 81%. The final analysis of a company’s financial data sample showed an accuracy rate of 69.6% on the enterprise access index. The improved random forest algorithm achieves a good balance between accuracy and recall, resulting in the potential for high accuracy in the domain of risk assessment. In addition, compared with other algorithms such as SVM and CRAT, the improved random forest algorithm has higher test values, indicating its excellent performance in financial risk prediction. To sum up, this study firstly verified the feasibility and accuracy of the improved random forest algorithm for financial risk prediction. Additionally, it validated the method's predictive capability using factual enterprise data samples and ultimately established a foundation for the enterprise's financial risk management framework. Construction offers a new theoretical direction.

Blockchain-based ontology driven reference framework for security risk management

Security risk management (SRM) is crucial for protecting valuable assets from malicious harm. While blockchain technology has been proposed to mitigate security threats in traditional applications, it is not a perfect solution, and its security threats must be managed. This paper addresses the research problem of having no unified and formal knowledge models to support the SRM of traditional applications using blockchain and the SRM of blockchain-based applications. In accordance with this, we present a blockchain-based reference model (BbRM) and an ontology driven reference framework (OntReF) for the SRM of traditional and blockchain-based applications. The BbRM consolidates security threats of traditional and blockchain-based applications, structured following the SRM domain model and offers guidance for creating the OntReF using the domain model. OntReF is grounded on unified foundational ontology (UFO) and provides semantic interoperability and supporting the dynamic knowledge representation and instantiation of information security knowledge for the SRM. Our evaluation approaches demonstrate that OntReF is practical to use.

Opinion pieces: On data and models: Is more always better?

With regards to data and model sophistication, the new mantra for financial services and FinTech seems to be ‘the more the better’, supported by attractive business cases in risk underwriting, fraud detection, customer lifetime value management, conditional investment risk/return optimisation and improving customer journeys, to name a few. However, more data and more sophisticated models are not always a universal panacea and may lead to bad business outcomes if not managed appropriately in the context of the desired business outcome. This paper summarises the evolving business cases for increasing data and models in the risk management domain and their associated risks. Making the associated risks transparent naturally leads to the conclusion that a timeless risk mitigation approach — common sense — is critically necessary to complement the more structured model risk management (MRM) framework that is evolving.

Operational Risk framework and Standardised Measurement Approach (SMA)

On December 2017, the Basel Committee published the “Basel III: Finalising post-crisis reforms” (also known as Basel IV) that introduces the Standardised Measurement Approach (SMA) to define the Pillar I operational risk capital requirement that is foreseen to entry into force on the 1st of January 2025, replacing all the existing approaches. This approach not only introduces a new method to be used to calculate the operational risk capital requirement but details several updates that have to be applied to the main components of the framework such as Governance, Loss Data Collection and Risk Self-Assessment. With the entry into force of the SMA, banks have the chance to fully re-think their operational risk Management Framework (ORMF) integrating the different components and making it more efficient and effective in terms of data governance, process management and reporting. This paper describes the SMA methodology to be implemented to calculate the Pillar I operational risk capital requirement and provides an overview of the expected impact on the different components of the ORMF of the banks.

Climate Change Stress Testing for the Banking System

717It is apparent that climate change is creating financial risks. These risks are of such a nature that they can be regarded as systemic: they are exogenous shocks which may simultaneously cause or contribute to the failure of multiple significant financial institutions. As a result, regulatory tools available to monitor and manage systemic risk have recently been deployed in the context of climate change risks. Such tools include stress testing and scenario analysis. This article examines international initiatives, such as those of the Network for Greening the Financial System, as well as specific central bank initiatives including those by the Bank of England. After some initial observations around climate data, stress test design, and central banks’ mandate, this paper continues to discuss further possible inclusion in the prudential regulatory framework. In particular, the question is raised if capital requirements should be adjusted and if changes should be made to the risk management and governance framework. This paper argues in favour of the latter, but is more cautious as regards the former.

PUBLIC PROCUREMENT MANAGEMENT IN THE CONTEXT OF ROMANIA LEGISLATION: CHALLENGES AND PERSPECTIVES

The purpose of this article is to bring to public attention the view of managers from Romanian state organizations on the potential risks related to public procurement procedures, in the current context of the legislative framework. The research aims to identify and gain a deep understanding of the concerns, challenges and obstacles these professionals face in the procurement process, which is often complicated and subject to rigorous scrutiny. The purpose of the article is to provide recommendations based on the data collected, which will contribute to the improvement of the risk management framework in public procurement and to increase the awareness and training of managers to face the challenges in this field. In this way, the aim is not only a better understanding of the current landscape, but also the facilitation of possible legislative or procedural developments that increase efficiency and Clarity and openness in the public procurement process in Romania.

Integrated Attack Tree in Residual Risk Management Framework

Safety-critical cyber-physical systems (CPSs), such as high-tech cars having cyber capabilities, are highly interconnected. Automotive manufacturers are concerned about cyber attacks on vehicles that can lead to catastrophic consequences. There is a need for a new risk management approach to address and investigate cybersecurity risks. Risk management in the automotive domain is challenging due to technological improvements and advances every year. The current standard for automotive security is ISO/SAE 21434, which discusses a framework that includes threats, associated risks, and risk treatment options such as risk reduction by applying appropriate defences. This paper presents a residual cybersecurity risk management framework aligned with the framework presented in ISO/SAE 21434. A methodology is proposed to develop an integrated attack tree that considers multiple sub-systems within the CPS. Integrating attack trees in this way will help the analyst to take a broad perspective of system security. Our previous approach utilises a flow graph to calculate the residual risk to a system before and after applying defences. This paper is an extension of our initial work. It defines the steps for applying the proposed framework and using adaptive cruise control (ACC) and adaptive light control (ALC) to illustrate the applicability of our work. This work is evaluated by comparing it with the requirements of the risk management framework discussed in the literature. Currently, our methodology satisfies more than 75% of their requirements.

Tempering Financial Reporting Risk through Board Risk Management

Recent corporate governance failures have heightened stakeholder expectations that the board of directors engage in robust oversight of the firm’s risk management processes. This expectation is in line with widely embraced enterprise risk management frameworks, which assert that strong board risk management is a key component of an entity’s risk management process. We use a hand-coded measure of board engagement in risk management from the recent literature to measure the robustness of that oversight for a sample of large, publicly traded U.S. firms and examine the relationship between robust board risk management (board risk management) and firm-wide strategies for mitigating financial reporting risk. While controlling for board composition-related characteristics, we found a positive association between robust board risk management processes and two avenues for mitigating financial reporting risk (i.e., more effective internal control over financial reporting and the selection of industry specialist auditors). Our results indicate that firms with more robust board risk management are associated with fewer actual instances of materially misstated financial statements and less earnings management.

A novel framework for risk management of software projects by integrating a new COPRAS method under cloud model and machine learning algorithms

A novel framework for risk management of software projects by integrating a new COPRAS method under cloud model and machine learning algorithms

Supporting Preparedness and Response to Cyclone Freddy In Madagascar- A Contribution from the Social and Behaviour Change Communication

Social and Behaviour Change Communication (SBC) is one of the vital strategic programs that aim to empower people to be resilient in preparation and response to emergencies. This paper outlines steps undertaken by SBC partners in Madagascar as a contribution towards preparation and response initiatives to cyclone Freddy, and discusses observations and lessons learnt to inform future programming in the country and other cyclone-affected regions. It bases its conceptual framework around the emergency prevention, preparedness, response and recovery (PPRR), the Emergency Risk Management Framework (ERM) as well as the UNICEF Framework on Accountability to Affected Population (AAP) to define the interventions based on three major phases of the intervention i.e., before, during and after. An SMS-based survey was used as a feedback mechanism and as a tool to assess SBC interventions 3 days after the passage of cyclone Freddy. The survey used a structured questionnaire where 450 respondents participated from 13 regions of the country. Scouts (youth mobilisers) and other NGO partners in the emergency network conducted phone calls, entered data into a Kobo-Collect template and analysed the data using simple percentiles in excel sheets. Analysis of the processes and results of the survey indicated that there was adequate utilisation of systematic steps in emergency preparedness. These included strategic planning and prepositioning of communication materials in all the 23 regions of the country, coordination and partnership at national, regional and district levels, implementation of a mixture communication and engagement methods and efforts to collect and respond to feedback. Three days from the onset of Freddy, the affected people were highly exposed to life saving messages (86%) but needed more exposure to life improving messages i.e., health (29.6%), child stimulation (29.3%), WASH (29.3%), nutrition (18%), Gender-based Violence (10.2%) and Violence against Children (4%). SBC interventions showed positive results in the use of bed nets to prevent malaria (85.7%), hand washing with soap to prevent diarrheal diseases and COVID-19 (95.6%) and reporting of cases on gender-based violence and violence against children (31.6%). 50.9% of the interviewed individuals acknowledged having been well informed about humanitarian interventions.

Navigating the interconnected risks in currency valuation: unveiling the role of climate policy uncertainty.

Given the significance of fostering sustainable climate conditions for long-term economic stability and financial resilience, this study probes the connection between climate-related policy ambiguity and its implications for currency valuation. In doing so, the current study investigates the interconnected effects of climate policy on economic policy uncertainty and geopolitical risk with the currency valuation in ASEAN countries. Employing wavelet coherence analysis and partial wavelet coherence analysis, the paper highlights the complex relationships among these factors and their implications for exchange rate fluctuations. Using data from 2000 to 2022, the findings reveal that climate policy uncertainty is an important driver of exchange rate movements, amplifying the impact of economic policy uncertainty and geopolitical risk. Furthermore, the study identifies a vicious cycle between climate policy uncertainty and exchange rates, potentially impacting the region's macroeconomic stability and long-term economic growth. The study presents several policy recommendations to address economic and climate policy uncertainties comprehensively based on the findings. These recommendations include establishing national frameworks for climate risk management, enhancing policy credibility and macroeconomic stability, and promoting regional integration to mitigate the influence of geopolitical risk on exchange rates.

E-waste supply chain risk management: a framework considering omnichannel and circular economy

PurposeIn the last few years, environmental issues have become a matter of survival. In this sense, e-waste management is among the major problems since it may be a way of mitigating mineral depletion. In this context, the literature lacks e-waste supply chain studies that systematically map supply chain challenges and risks concerning material recovery.Design/methodology/approachGiven this context, the authors' paper conducted a systematic literature review (SLR) to build a framework to identify the constructs of e-waste supply chain risk management.FindingsThe paper revealed the theoretical relationship between important variables to achieve e-waste supply chain risk management via a circular economy (CE) framework. These variables include reverse logistics (RL), closed-loop supply chains (CLSC), supply chain risk management, supply chain resilience and smart cities.Originality/valueThe literature contributions of this paper are as follows: (1) a complete list of the risks of the e-waste supply chains, (2) the techniques being used to identify, assess and mitigate e-waste supply chain risks and (3) the constructs that form the theoretical framework of e-waste supply chain risk management. In addition, the authors' results address important literature gaps identified by researchers and serve as a guide to implementation.