Good Risk Governance Pays

Good Risk Governance Pays

Investment Best Practices | Risk Management | Valuation

Category Archives: Risk Management

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Trading Ahead Of Investment Policies and Procedures

Posted in Compliance, Fiduciary Liability, Governance, Investment Management, Non-Profits, Risk Management, Trading
In response to a recent request by a reporter, I examined some public documents relating to what appears to be unauthorized trading. As is the situation when only some information is available, it’s hard to tell whether said trades can be characterized as rogue, mistaken or deemed to fall within a broader, albeit ill-communicated, mandate. Should this matter proceed further, obviously… Continue Reading

Fake News, Plagiarism and Business Ethics

Posted in Disclosure and Transparency, Ethics, Investment Management, Non-Profits, Risk Management, Trading
If you are a consumer of factual information, your head is probably spinning from the fast-paced discussions about what constitutes real news versus fake news. Not being a journalist, I’ll leave questions about a reporter’s obligations to the media industry’s standard-setters. That said, I can and do vote with my dollars. If I sense that an article or broadcast reflects shoddy… Continue Reading

Employers Worry About Skills Gap That Impacts Bottom Line

Posted in Career Development, Risk Management
Benjamin Franklin declared that “An investment in knowledge pays the best interest.” Martin Luther King, Jr. offered “The function of education is to teach one to think intensively and to think critically.” While I wholeheartedly concur with these sentiments, I question whether it makes sense for an individual to pursue a college or university degree… Continue Reading

The Risk Of Taking Low Maintenance Customers For Granted

Posted in Customer Service, Risk Management
Treating customers poorly makes little sense, assuming a company considers them profitable and wants them to stay. The logic is straightforward. A diversified steady (or better yet growing) source of sales revenue enhances enterprise value and lowers business risk. Yet many organizations still struggle with all things customer service from (1) determining what buyers should receive for their money (2) calculating metrics… Continue Reading

Commodity Risk Management

Posted in Commodities, Risk Management
For chocolate lovers everywhere, rejoice. October 28 was National Chocolate Day. Halloween follows a few days later, offering another chance to indulge in candies that melt in your mouth. I have been a fan of pretty much everything chocolate since I was a little girl. I remember being deliriously happy about getting “right off the processing… Continue Reading

Educational Webinar About Pension Risk Management

Posted in ERISA, Pension, Risk Management, Susan Mangiero
Please join Dr. Susan Mangiero on November 2, 2016 for a one hour online program about pension risk management. The webinar is sponsored by the Professional Risk Managers’ International Association (“PRMIA“) in recognition of the importance of the subject. This learning event qualifies for one Continuing Professional Education (“CPE”) credit. A program description is shown below. You can… Continue Reading

Investment Management Delegation Challenges

Posted in Compliance, Fiduciary Liability, Investment Consultants, Investment Management, Risk Management
Chief Investment Officer describes the surge in delegated management activity as “staggering,” noting a nearly nine hundred percent rise in discretionary assets in recent times. Of the 188 asset owners that were questioned as part of a 2016 survey, many cited “better performance as being either ‘critical’ or ‘important’ to their decision to outsource…” Other findings suggest a willingness to authorize third… Continue Reading

Risk Management “What If” Focus

Posted in Risk Management
In watching television news this weekend, I am reminded that not everyone understands the proactive nature of risk management. I’ve heard the mantra before. “Why did I buy insurance? A year came and went and nothing happened. I could have saved the premium.” The problem with this thinking is that no one has a crystal ball. It’s impossible to know with… Continue Reading

Victoria’s Secret and Financial Benchmarking

Posted in Disclosure and Transparency, Investment Management, Risk Management
Its iconic fashion show won’t occur until this fall but Victoria’s Secret is in the headlines for another reason. Owner L. Brands, Inc. (“LB” ticker) will no longer mail about 300 million catalogs each year. The goal is to save between $125 to $150 million and be more eco-friendly. Shoppers can still purchase online or visit… Continue Reading

Reputation and the Investment Management Bottom Line

Posted in Customer Service, Disclosure and Transparency, Governance, Investment Consultants, Investment Management, Key Person, Risk Management
Those in the know understand that both qualitative and quantitative factors must be evaluated when estimating enterprise value. The list of appraisal considerations is too long to address in any one discussion. Suffice it to say that one should understand, measure and benchmark multiple facets of an organization’s business such as production processes, distribution channels, sales infrastructure and customer service. A clarity… Continue Reading

Investment Benchmarking “Must Do” Tasks

Posted in Disclosure and Transparency, Financial Reporting, Governance, Investment Management, Regulation, Risk Management
Whenever the topic of performance measurement comes up in conversation, I think back to a story someone told me about a woman who took the number two spot in a race. Proud of her accomplishment, she telephoned friends and family with the news. Here’s the catch. Only one other runner competed. Technically, her statement was… Continue Reading

Customer Service and the Financial Advisory Industry

Posted in Customer Service, Risk Management, Valuation
Once a company has identified the categories of customers it wants to attract and retain, most people would agree that providing effective service is important. After all, it is hard to expand enterprise value without a healthy growth in cash flow. While this is a truism for nearly all industries, financial advisory executives are thinking hard about this topic right… Continue Reading

Increased Regulation of Derivatives by Registered Funds

Posted in Derivatives, Disclosure and Transparency, International Investing, Investment Management, Mutual Funds, Regulation, Risk Management, Susan Mangiero, Trading
On December 11, 2015, the U.S. Securities and Exchange Commission (“SEC”) took steps to more actively regulate how derivative instruments are used by registered investment companies such as mutual funds, exchange-traded funds (“ETFs”), closed-end funds and business development companies. According to its Fact Sheet, a portfolio manager would have to either limit leverage via the use of derivatives to… Continue Reading

Investment Risk Is Here To Stay

Posted in Investment Management, Risk Management
Even if you did not celebrate Valentine’s Day on February 14, it was hard to miss the many bags of conversation candies, in between the chocolates and bouquets of flowers. According to the website for the New England Confectionery Company (“NECCO”), Sweethearts® have been around since 1902. “Each year, NECCO manufactures about two billion hearts… Continue Reading

Investment Advisors, Monitoring and Compliance

Posted in Fiduciary Liability, Governance, Investment Management, Regulation, Risk Management
I talked last week about the intricacies of investment monitoring as part of a Bloomberg BNA webinar entitled “Life After Tibble: Investment Monitoring and Litigation Defense Considerations for ERISA Fiduciaries.” One of the points I made, repeatedly I might add, is that it is critical to evaluate the facts and circumstances related to a specific situation.… Continue Reading

Governance, Risk Management and Compliance (“GRC”) and Nasty Colleagues

Posted in Compliance, Investment Management, Regulation, Risk Management
Effective Governance, Risk Management and Compliance (“GRC”) critically depends on the hiring, retention and oversight of talented and ethical professionals. These individuals don’t need to be best friends. To the contrary, a risk manager must be tough and able to say no to traders and deal-makers if their individual or collective activity jeopardizes enterprise value.… Continue Reading

Duck Humor and Investment Risk Management

Posted in Risk Management
A duck walks into a store and asks the man behind the counter if he has any candy. The storekeeper says “No, we don’t.” Twenty four hours later, the duck returns to the store, asks the same question and gets the same answer. He repeats this activity daily with unchanged results. After a week, the… Continue Reading