Strategy risk and strategic risk & Audit Commitee (Strategy risk…
Strategy risk and strategic risk & Audit Commitee
Edge over competitors
Possessing experience in weathering similar crises in the past.
The institutional memories as well as the individual experiences of how the crises unfolded may provide an advantage over competitors who are new to the risk.
, since firms with access to capital markets or large cash balances, superior technology and better trained personnel can survive risks better than their competitors.
Speed of the response to the risk
, since not all firms, even when provided with the same information, are equally effective at acting quickly and appropriately.
Finally, firms that have more operating, production or financial
built into their responses, as a result of choices made in earlier periods, will be able to adjust better than their more rigid compatriots.
Superior timely and reliable information when confronted with a crisis
, allowing the firm to map out a superior plan of action in response.
Strategy risk summary
Strategic risk runs across corporate governance. Sensible decision making at the top of a bank, wise investment in markets and products, sensible utilisation of technology and great care in committing the bank to new operations without proper review of the potential outcome of that course of action.
The implementation of any strategic initiative will involve an element of risk and this is necessary in order for firms to gain a competitive advantage. However, if too much risk is taken on, then there is the possibility of strategic errors occurring.
The audit committee will review financial reporting as well as appoint and overview the work of the external auditors.
review the financial statements published in the name of the board and the quality and acceptability of the related accounting policies, practices and financial reporting disclosures
review the scope of the work of the group audit department, reports from that department and the adequacy of its resources
review the effectiveness of the systems for internal control, risk management and compliance with financial services legislation and regulations
approve the external auditors’ terms of engagement and remuneration
assess the external auditors’ independence and objectivity
recommend the external auditors’ appointment, re-appointment and removal
review the results of the external audit and its cost effectiveness
review reports from the auditors on audit planning and their findings on accounting and internal control systems
review procedures for handling complaints regarding accounting, internal accounting controls or auditing matters and for staff to raise concerns in confidence.