Manigent, a Strategy and Risk Management Consultancy, are hosting a six-weekly 'Happy Hour' for those working in Risk Management. This article highlights the importance of Strategy and Risk Management, with examples of businesses who have suffered as a result of poor management.
Online PR News – 27-January-2012 – – A free glass of wine, fruitful discussion and networking with likeminded individuals…
If the above sounds interesting, join us in the heart of the City after work for the NEW ‘Strategy and Risk Forum’, introduced by Strategy and Risk Management Consultants Manigent. Every six weeks, we invite you to join us after work for a discussion provoking 20-minute presentation and wine & snack networking opportunity. We welcome all opinions surrounding Strategy and Risk Management and are excited to explore your experiences within the industry.
Why Strategy and Risk?
Recent and ancient history alike are full of failures of companies having disregarded the risks induced by their strategy. No sector is spared and even the most successful executives can trip over. The aggressive strategy by Jon Corzine (former CEO of Goldman Sachs) when turning a US brokerage firm into a “Capital Markets-Focused Investment Bank” and growing proprietary trading to produce 20% of overall revenues of the firms led, less than 9 months later, to the liquidation of MF Global (October 31, 2011) after wrong bets on Eurozone sovereign debt.
Likewise, the enthusiasm and pride from French bank Société Générale whilst they were a market leader in equity derivatives trading between 2006-2007, fostered a generalised lack of risk awareness, allowing a €5bn loss in rogue trading by Jerome Kerviel that almost bankrupted the bank; they have still, some may argue, not fully recovered today.
In the insurance sector, insurers and reinsurers, particularly those that were exposed to the equity markets for the investment of their premiums during the booming late nineties in a relaxed regulatory environment, suffered heavy losses after the burst of the technological stock market bubble in 2000-2002. For instance, Group profit of Munich Re fell from €175bn in 2000 to €250m in 2001. Munich Re also lost 79% of its market value between its peak in November 2000 and its bottom in February 2003 (Data Source: FT.com). Amongst all the risks, insurers and reinsurers pride themselves to bear and measure; the risk policy regarding the reinvestment of premiums is an important part of the firm’s strategy.
Finally, in the technological sector, the legendary firm, 131-year-old Eastman Kodak Co., more frequently referred to as Kodak, struggles to survive after a long slide started with the rise of digital photography that the photo giant did not catch in time, even though they had researched the technology. Kodak is now is attempting to sell some of its patent portfolio, to avoid having to file for Chapter 11 in the coming weeks (WSJ, Jan 5, 2012). Risks arising from competitive technologies and better products are a cornerstone of strategy definition.
“Strategy and Risk Aligned” will be the first topic of our forum, highlighting positive and negative experiences from firms having either overlooked their risks, or, contrarily, properly anticipated and responded to them, using good practices and necessary risk awareness in the Board room.
We welcome you to join us, share your views and experiences or simply enjoy a drink and listen.
To register for this free-to-attend event, and find out more about future Happy Hour evenings, visit the Manigent website.