Management: An Evidence-Based Approach - 3rd edition 2010
Home | Cases > Chapter 2 > Case 2.5
Source: Andrew Bolger,Financial Times, June 2, 2004 (Special Report FT risk management) |
Failure to look ahead increases risk to businessRisk management has undoubtedly shot up the corporate agenda in recent years with fears of war and terrorism being added to the usual list of business worries. Shivan Subramaniam, chairman and chief executive of FM Global, a commercial and industrial property insurer, says: 'Corporations are operating in a turbulent world where businesses are seeking growth through globalization, outsourcing, consolidation, just-in-time delivery and cross-border supply, further increasing their potential exposure to risk.' 'While acts of terrorism receive the most coverage, it's the more traditional events such as fires, floods, explosions, power failures or natural disasters that have the biggest impact.' However, research shows that more than one-third of the world's leading companies are not sufficiently prepared to protect their main revenue sources and have room for improvement.
This special report is on FT.com at www.ft.com/riskman2004 |
Source: Financial Times, January 26, 2005. |
At a glanceAs leaders gather for the World Economic Forum in Davos, the shock of the Indian Ocean tsunami may be fresh enough to help create a spirit of unity to address the many issues that still divide rich and poor, north and south, secularists and religious fundamentalists. The key issues: |
Source: Financial Times, December 15, 2004 (Special Report) |
At a glanceAs companies increasingly recognize that good corporate governance can enhance their reputations and reduce business and legal risks, there is also a growing interest in indices and standards that measure best practice which investors can use and trust. This report looks at the new FT/ISS index which aims to calculate which markets have the most well-governed companies. The key issues: This special report is on FT.com at www.ft.com/corpgov2004 |
Source: www.ft.com/corpgov2004 |
When such lists of companies practising corporate government are compiled, it is most interesting to see which firms are excluded. Executives at those companies will spend a good part of the next three months figuring out why they are not on the list. No company wants to be known for bad corporate governance. Companies are assessed on a wide range of criteria. There are eight broad groups of criteria, covering the board, audit, company charter or by-laws, takeover provisions, executive and director compensation, progressive factors, ownership and director education. Under the board grouping, the minimum standard is that a majority of the board should be independent. The compensation criteria cover such issues as whether shareholder approval is needed before option plans are approved and whether directors receive part of their compensation in the form of stock. |
Questions:
-
If you combine the messages 'at a glance' from the three FT reports mentioned, how would you assess risks to present business leaders?
-
How would you score companies which you know and/or where you would like to work (in the near future) on the FTSE/ISS list? Do they make the list?
-
Do these issues interest you personally or is it just something you preferably leave to others?
Reading tips:
Section 1.4
Section 1.8
Section 2.5
Section 2.7
Section 2.8
Internet tips:
www.ft.com/corpgov2004
www.ft.com/specialreports
www.ft.com/theworld2005