Professional Documents
Culture Documents
ESTABLISHMENTS
Unethical problems in business ethics occur in many forms and types. The most common of
these unethical practices of business establishments are misrepresentation and over-persuasion.
• Deceptive Packaging. It takes many forms and is of many types. One type is the
practice of placing the product in containers of exaggerated sizes and misleading shapes
to give a false impression of its actual contents.
2. Advertisement that claims that the product is the “fastest selling brand” or the
“product of the year”.
• Quantity understatement or Short numbering. The seller gives the customer less
than the number asked for or paid for. Short numbering is often practiced in selling
situations where the product being sold is in such shape or is packed in a manner that
would make counting the product difficult or inconvenient.
✓ Indirect misrepresentation is characterized by omitting adverse or unfavorable information
about the product or service.
• Passive deception. Direct misrepresentation gives business a bad name while indirect
misrepresentation or passive deception is not as obvious, it nonetheless contributes to the
impression that businessmen are liars and are out to make a fast buck. It is unable to
provide the customer with the complete information that the latter needs to make a fair
decision.
B. OVER-PERSUASION
3. Convincing a person to buy what he does not need just because he has the
capacity or money to do so.
CORPORATE ETHICS
Practices of corporate management that involve ethical considerations may be classified into
two: practices of the Board of Directors and practices of executive officers. In many cases, the
practices may apply to both categories of corporate management and the only dividing line is in
financial magnitude and implications of a particular corporate management practice.
✓ Plain Graft. Some of the Board of Directors help themselves to the earnings that otherwise
would go to other stockholders. This is done by voting themselves and the executive officers
huge per diems, large salaries, big bonuses that do not commensurate to the value of their
services.
✓ Insider Trading. It occurs when a broker or another person with access to confidential
information uses that information to trade in shares and securities of a corporation, thus giving
him an unfair advantage over other purchasers of these securities.
✓ Negligence of Duty. A more common failure of the members of the Board of Directors than
breach of trust is neglect of duties when they fail to attend board meetings regularly.
• To interfere with, restrain or coerce employees in the exercise of their right to self-
organization.
• To contract out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their right to self-
organization.
• To discriminate with regard to wages, hours of work, and other terms or conditions of
employment in order to encourage or discourage membership in any labor organization.
• To pay negotiation or attorney’s fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute.
✓ Making false claims about losses to free themselves from paying the compensation and benefits
provided by law.
✓ Making employees sign documents showing that they are receiving fully what they are entitled to
under the law when in fact they are only receiving a fraction of what they are supposed to get.
✓ Sexual Harassment
✓ Conflicts of Interest
• The employee uses or discloses confidential information for his or someone else’s
personal gain.
• The employee uses for his own benefit a business opportunity in which his employer has
or might be expected to have an interest.
✓ Dishonesty
• Padding an expense account through the use of fake receipts when claiming
reimbursements.
3. Determine who is affected by the outcome of the dilemma and show how each person or
group is affected.
4. Identify the alternatives available to the person who must resolve the dilemma.
ILLUSTRATIVE CASE:
Bert Cruz has been working for 6 months as a staff assistant for a law firm, Alvendia and
Castro. Currently he is assigned to the case of Ryan Manufacturing Company under the
supervision of Carlos Reyes, an experienced senior lawyer. There are three junior legal of
assistants assigned to the case, including Bert, Carlos and more experienced assistant, Martha Sy.
During lunch on the first day, Carlos says, “It will be necessary for us to work a few
hours on our own time to make sure we come in on budget. This case isn’t very profitable
anyway, and we don’t want to hurt our firm by going over budget.
We can accomplish this easily by coming in a half hour early, taking a short lunch break,
and working an hour or so after normal quitting time. We just won’t write that time down on
our time report.”
Bert recalls reading in the firm’s policy manual that working hours and not charging for
them on the time report is a violation of Alvendia and Castro employment policy. He also
knows that seniors are paid bonuses, instead of overtime, whereas staffs are paid for overtime but
get no bonuses.
Later when discussing the issue with Martha, she says, “Carlos does this on all of his job.
He is likely to be our firm’s manager. The partners think he is great because his job always come
in under budget. He rewards us by giving us good engagement evaluations, especially under the
cooperative attitude category. Several of the other senior staff follow the same practice.”
ETHICAL ISSUE
The ethical issue in this situation is not difficult to identify. Is it ethical for Bert to work
hours and not them as hours worked in this situation?
There are typically more people affected in situations in which ethical dilemmas occur
than would normally be expected. The following are the key persons involved in this situation:
✓ Inform Carlos that he will not work the additional hours or will charge the additional
hours to the engagement.
In deciding the consequences of each alternative, it is essential to evaluate both the short-and
long-term effects. There is a natural tendency to emphasize the short term because those consequences
may be more important. For example, consider the potential consequences if Bert decides to work the
additional hours and not report them. In the short term, he will likely get good evaluations for
cooperation and perhaps a salary increases. In the longer term, what will be the effect of not reporting
the hours this time when other ethical conflicts arise?
Consider the following similar ethical dilemmas Bert might face in his career as he advances:
✓ A supervisor asks Bert to work 3 unreported hours daily and 15 unreported hours each weekend.
✓ A supervisor asks Bert to initial certain procedures as having been performed when they were
not.
✓ Bert concludes that he cannot be promoted to manager unless he persuades assistants to work
hours that they do not record.
✓ Management informs Bert, who is now a partner, that either the company gets a P400,000 legal
fee or the company will change lawyers.
✓ Management informs Bert that the legal fee will be increased P50,000 if Bert can find a plausible
way to increase probability or winning the case.
APPROPRIATE ACTION
Only Bert can decide the appropriate option to select in the circumstances after considering his
ethical values and the likely consequences of each option. At one extreme, Bert could decide that the
only relevant consequence is the potential impact on his career. Most of us would conclude that Bert is
an unethical person if he follows that course. At the other extreme, Bert can decide to refuse to work for
a firm that permits even one supervisor to violate firm policies. Many people would consider such an
extreme reaction naïve.
WHAT IS CORRUPTION?
✓ Corruption is the abuse of private and public office for personal gain. It includes acts of bribery,
embezzlement, nepotism, kickbacks and state capture.
✓ This is often associated with and reinforced by other illegal practices such as bid rigging, fraud,
or money laundering, extortion.
✓ Simply defined, corruption is receiving, asking for or giving any gratification to induce a person
to do a favor for private gain. This act covers not only public corruption involving misuse of
public power by elected politician or appointed civil servant but also private corruption between
individuals and businesses.
✓ A broader definition of corruption follows: “Corruption is the misuse of entrusted power (by
heritage, education, marriage, election, appointment) for private gain. It covers not only the
politician and the public servant but also the CEO, CFO and other employees of a company.”
✓ It involves wrong doing on the part of an authority or powerful party through means that are
illegitimate, immoral or incompatible with ethical standards. Corruption often results from
patronage and is associated with bribery.
✓ A company paying bribe to win the public contract to build the local highway, despite proposing
a sub-standard offer.
✓ A politician redirecting investments to his hometown rather than to the region most in need.
✓ Public official embezzling funds for school renovation to build his private villa.
✓ A private company manager recruiting an ill-suited friend for a high level position.
✓ Local officials demanding bribes from ordinary citizens to get access to a new water pipe.
✓ A salesman bribing the purchasing manager of a company to give preference to his products.
Corruptions spread when there are opportunitie, when risk is minimal in comparison to benefits
obtained or when one is confronted with issues like:
✓ Career advancement
Those engaged in corruption learn how to be dishonest. The next corrupt actions become easier
to do unless one is firmly rooted on solid principles and has been nurtured in an upright manner.
✓ If allowed to take root in society, it can lead to a breakdown in social order and lives are affected
when ordinary people are prevented from receiving all the essential services that they are entitled
to.
✓ Corruption may have drastic impacts like most of the public funds are used on the leisure and
lifestyle of influential people instead of allotting them on hospitals, schools and other basic needs
of general public.
✓ It creates unfair competition and increases the cost of doing business. Every form of corruption is
bad for economic growth and could result to tarnished reputation of an entire country.
✓ Corruption causes businesses to flee from the country because businessmen find it a constant
threat for their progress.
✓ Corruption is cancer that spreads rapidly all over the body. Corruption in Australia, Canada and
few European countries has dropped extensively due to adoption of concrete measures.
Nevertheless, corruption in developing and underdeveloped countries is still a critical problem.
CHARACTERISTICS OF CORRUPTION
✓ Recipients and payers. Corruption is the abuse of entrusted power and elected authority
for private profit. Worldwide complaints are heard about politicians and public officials who
accept bribes and enrich themselves privately at the expense of the common citizen. This may be
at the expense of the employee and the employer; consumer and producer; renter and tenant; the
one applying for a permit to do something, or asking exemption from an obligation to pay or to
deliver a product or a service. All those cases may be considered to be abuse of power and
authority for one’s own benefit.
✓ Extortion. They do not only blame politicians and public officials for willingly accepting
bribes. It is also often alleged that those having authority in our society ask to be bribed or give
us the opportunity to bribe. This means that the question “who is to blame”, shifts from the
person who pays to the person who extorts and receives. Again on the ground of allegation:
“There’s no escaping from it, for if you don’t pay, you are bound to fall behind.”
✓ Lubricant of society. Many think that paying bribes is required to ensure smoother
operation of society. They think that without an occassional gift (for example around Christmas
and New Year), or incidentally (a gift on the occasion of a marriage or when a child is born) for
instance upon entering into a contract for the supply of a product or a service, such contracts
might be lost to them and might be assigned to others.
✓ An ethical dilemma. The mere fact that both the payer and the recipient of bribes want
to keep their behavior secret (and often succeed in doing so as well) shows that such behavior is
generally considered to be improper. Many consider corruption to be an ethical problem, a
behavioral problem. And refer to it as being “sinful”, a wrong doing. It is a problem to be solved
by means of personal reform.
✓ Culture. Gifts are inherent to human relations and therefore present in all cultures. You
give and receive gifts on the occasion of birthdays, Santa Claus or Christmas; on the occasion of
memorable events; an appointment or a departure; marriage or retirement.
The Former Secretary of Finance reported in 2016 that the Philippines loses P200 billion from
smuggling and P400 billion from tax evasion perpetuated through collusion with some personalities in
the government agencies. P2.6 trillion is lost annually in corruption globally.
✓ Judicial System. Corruption risks are high in the judicial system. Bribes and irregular
payments in return for favorable judicial decisions are common. The judiciary is formally
independent, but the rich and powerful have frequently influenced proceedings in civil and
criminal cases. Procedural fairness and transparency are severely undermined by nepotism,
favoritism and impunity. In one recent case, a businessman filed an administrative complaint in
the country’s Supreme Court against Makati City judge for allegedly asking for a Php 15 million
bribe in exchange for a favorable ruling in an insurance claim. At the time of review, no further
updates on the case were available.
✓ Police. There is a high-risk of corruption when dealing with the police. The national
police force is widely regarded as one of the most corrupt institutions in the country. Reports of
the police and military engaging in corruption, extortion, and being involved in local rackets are
widespread. Companies report that they cannot rely on the police services.
✓ Public Services. Companies contend with a high corruption risk when dealing with the
public services. Approximately half of business executives reported being asked for a bribe by
someone on the government in 2017. Nearly three out of five business reported expecting to give
gifts in order to get things done.
✓ Land Administration. Corruption risks in the land administration are high. Two out of
five companies report expecting to give gifts when obtaining a construction permit. Property
rights are formally recognized and protected in the Philippines, but in practice, the law is not
always upheld. Businesses have insufficient confidence in the protection of property rights.
✓ Tax Administration. There is a high risk of corruption when dealing with the tax
administration. Around one in seven companies indicate they expect to give gifts in meetings
with tax officials. Tax regulations are among the most problematic factors for conducting
business in the Philippines. Companies indicate that they perceive that only fifth of businesses in
their line of business pay their taxes honestly.
✓ Public Procurement. There is a very high risk of corruption in the public procurement
sector, which is subject to rampant corruption, irregularities, and inconsistent implementation of
legislation. Likewise, more than a fifth of businesses report they expect to give gifts in order to
win a government contract.
✓ Natural Resources. Companies operating in the natural resources sector face a high
risk of corruption. The Philippines has shown market improvements in its natural resource
governance in the past few years; the country has a good enabling environment and its regulatory
quality and control of corruption are judgedas adequate. However, poor value realization and
revenue management have caused the country’s overall resource governance to be judged as
“weak”.
PREVENTION OF CORRUPTION
Corruption in Singapore is under control. However, a clean system is not a natural state of
affairs. Corruption comes from weakness of human nature – greed, temptation, the desire to amass
wealth or to obtain business through unfair means. Even with harsh penalties, corruption cannot be
eradicated completely.
Below are some measures businesses and organizations caqn adopt to help prevent corruption in
the workplace:
✓ Policy on Gifts and Entertainment. Gifts and entertainment are often offered in the
legitimate course of business to promote good relations. However, if it is too frequent or lavish,
or done with the deliberate intention to gain an unfair business advantage, such as gifts and
entertainment can be tantamount to corruption, regardless of whether the recipient is able to
fulfill the request of the giver.
✓ Act Establishing a Code of Conduct and Ethical Standards for Public Officials and Employees
In 2010, a private sector-led campaign aiming to strengthen ethical standards in business, the
Integrity Initiative was organized after the Philippines received a grant from Siemens. The Makati
Business Club (MBC) and the European Chamber of Commerce of the Philippines (ECCP) serve as the
Integrity Initiative Secretariat.
Ultimately, the Integrity Initiative hopes to build trust in government, a more equitable society
and fair market conditions. This will result in improved competitiveness and increased business
confidence, which will evident with the increase in domestic and foreign investments, and more
employment generated for Filipinos. Subsequently, with more Filipinos employed in vibrant and
dynamic Philippine economy, the alleviation of poverty should become inevitability. Through the
initiative, the Philippines will become a benchmark in the transformation process of any country
regarded as highly corrupt to one that fosters an ethical and progressive business environment.
To achieve this goal, consultations, roundtable discussions and public forums involving business
leader compliance officers, corporate governance experts, academics and practitioners from small and
medium enterprises to Fortune 500 companies. “ An Integrity Compliance Handbook” containing the
key documents and toolkits in Integrity Initiative was published for the use of organizations to promote
ethical business practices.
Since 2010, MBC and ECCP have been joined by various organizations and industry
associations in taking an active role in promoting honesty and transparency in Philippine business. As
of 2018, a number of the organizations and industry associations have been taking active participation in
this movement.
With the active participation of these organizations, is hoped that the problem of massive graft
and corruption in the Philippines will be minimized if not totally eliminated.
CORPORATE VALUES
Managing, protecting, and enhancing reputation has become one of the greatest challenges facing
today’s board. The reputation of a business is a critical factor in the determination of its value. The
values and ethics of the organization need to be explicitly managed.
✓ Guide directors and senior executives, as a minimum, as to the practices necessary to maintain
confidence in the organization’s integrity. Other members of staff should also have a code of
conduct relevant to them which may be the same as that for directors and senior executives or
may be a complementary version.
✓ Promote responsibility and accountability of individuals for reporting and investigating reports of
unethical practices and,
An organization’s code of conduct recognizes the important role that business ethics play in the
success of today’s business, encouraging the board to actively develop an organizational culture that is
established on transparency, accountability and integrity.
One of the most significant accomplishments of the Integrity Initiative is the preparation of the
“Unified Code of Conduct for Business”. The Code’s purpose is two-fold.
First, it harmonizes existing ethical standards among business operating in the Philippines. It
ensures that different market players adhere to the same rules of the game in order to create fair market
conditions and promote transparency in doing business.
Second, the Code formally communicates the signatories’ commitment to upholding high
standards of ethics in all business transactions. It articulates the belief that securing profit at the expense
of integrity is an unacceptable and unsustainable way of conducting business and that measures have
been taken to enforce and cultivate integrity habits within the signatories’ respective organizations.
THE UNIFIDE CODE OF CONDUCT FOR BUSINESS (Integrity Initiative)
✓ TOP MANAGEMENT
• Our officers strongly communicate our organization’s position against bribery, corruption
and unethical business practices within the company and the broader public; comply with
all the requirements of government regulatory bodies; and prohibit cover-ups and
falsified reports that conceal improper transactions.
• Management strongly supports integrity practices and allocates sufficient resources for
their implementation.
✓ HUMAN RESOURCES
• In the spirit of fairness and due process, all employees have the right to file and respond
to complaints against practices suspected to be illegal or unethical.
• We have appropriate tools to confidentially receive, monitor and act on internal and
external complaints.
• Employees filing complaints will be protected from all types of retaliation, while those
involved in unethical practices will be subject to commensurate disciplinary actions.
• We have instituted training programs on business ethics covering all levels of the
organization.
• Employees and all third parties engaged by our company to act as our intermediaries,
agents or representatives are not permitted to offer, promise or give, as well as demand or
accept concessions – directly or indirectly- in order to obtain, retain, or secure any undue
advantage in the conduct of business.
• We abide by existing laws when transacting with government agencies (as stipulated
under RA 6713 – Code of Conduct and Ethical Standards for Public Officials and
Employees and RA 3019 – Anti Graft and Corrupt Practices Act.)
• We require all our employees to ensure that all books and records they create or are
responsible for are complete and accurate.
• Our financial records conform to standard accounting principles, comply with SEC
requirements on disclosure and transparency, and abide by anti-money laundering laws
(RA 9160) and international conventions.
• A track record of integrity and compliance with existing laws is a prerequisite when we
vet third party consultants, suppliers, intermediaries and agents. Our company has
transparent procurement procedures, provides equal opportunities for all suppliers and
prohibits collusion between and among our employees and suppliers.
• Recognizing that the Integrity Initiative is sustained through widely shared ethical
practices within the business community, we enter into integrity pacts with our suppliers
and ensure that they comply with the provisions of our pact.
• Contracting a third party to bribe or commit corrupt practices on behalf of the company is
strictly prohibited.
✓ LOGISTICS
• We do not tolerate any breaches in existing laws in exchange for undue advantage and
unethical concessions or favors. We pay correct duties and taxes based on transparent
assessment of goods and services.
• Employees are not penalized for refusing to pay bribes or facilitation payments even if it
results in failure to meet deadlines or loss of revenue.
• We will continue to align our operations to the principles contained in this Code
periodically assess and monitor our compliance to it. We will continue to share best
practices with the business community to strengthen ethical business processes in the
Philippines.
CHAPTER 11: RISK MANAGEMENT
INTRODUCTION
Effective corporate governance cannot be attained without the organization mastering the art of
risk management. And risk management in recognized as one of the most important competencies
needed by the board of directors of modern organization, large as well as small and medium-sized
business firms.
The levels of risk faced by business firms have increased because of the fast-growing
sophistication of organization, globalization, modern technology and impact of corporate scandals. In
addition therefore to compliance with legal requirements, top management should consider adequate
knowledge of risk management.
Risk management is the process of measuring or assessing risk and developing strategies to
manage it. Risk management is a systematic approach in identifying, analyzing and controlling areas or
events with a potential for causing unwanted change. It is the act or practice of controlling risk. It
includes risk planning, assessing risk areas, developing risk handling options, monitoring risks to
determine how risks have changed and documenting overall risk management program.
The International Organization of Standardization (ISO) identifies the basic principles of risk
management.
✓ Create value – resources spent to mitigate risk should be less than the consequence of inaction,
i.e., the benefits should exceed the costs.
✓ Create capability of continual improvement and enhancement considering the best available
information and human factors.
2. Identification of potential risks. Risk identification can start with the analysis of the source
of problem or with the analysis of the problem itself. Common risk identification methods are:
a. Objective-based risk
b. Scenario-based risk
c. Taxonomy-based risk
e. Risk charting
3. Risk Assessment. Once risks have been identified, their potential severity of impact and the
probability of occurrence must be assessed. The assessment process is critical to make the best
educated decisions in prioritizing the implementation of the risk management plan.
For the most part, the performance of assessment methods should consist of the following
elements:
✓ Determination of the risk (the expected likelihood and consequences of specific types of attacks
on specific assets).
✓ Business Risk. It refers to the uncertainty about the rate of return caused by the
nature of the business. The most frequently discussed causes of business risk are
uncertainty about the firm’s sales and operating expenses. Clearly, the firm’s sales are not
guaranteed and will fluctuate as the economy fluctuates or the nature of the industry
changes. A firm’s income is also related to its operating expenses. If all operating
expenses are variable, then sales volatility will be passed directly to operating income.
Most firms, however, have some fixed operating expenses (depreciation, rent, salaries).
These fixed expenses cause the operating income to be more volatile than sales. Business
risk is related to sales volatility as well as to the operating leverage of the firm caused by
fixed operating expenses.
✓ Default Risk. It is related to the probability that some or all of the initial investment will
not be returned. The degree of default risk is closely related to the financial condition of
the company issuing the security and the security’s rank in claims on assets in the event
of default or bankruptcy. For example, if a bankruptcy occurs, creditors, including
bondholders have a claim on assets prior to the claim of ordinary equity shareholders.
✓ Financial Risk. The introduction of financial leverage causes the firm’s lenders and
its stockholders to view their income streams as having additional uncertainty. As a result
of financial leverage, both investment groups would increase the risk premiums that they
require for investing in the firm.
✓ Interest Rate Risk. Because money has time value, fluctuations in interest rates will
cause the value of an investment to fluctuate also.
✓ Liquidity Risk. It is associated with the uncertainty created by the inability to sell
the investment quickly for cash. An investor assumes that the investment can be sold at
the expected price when future consumption is planned.
✓ Purchasing Power Risk. It is perhaps, more difficult to recognize than the other
types of risk. It is easy to observe the decline in the price of a stock or bond, but it is often
more difficult to recognize that the purchasing power of the return you have earned on an
investment has declined (risen) as a result of inflation (deflation).
a) MARKET RISK
Product Risk
• Complexity
• Obsolescence
• Research and Development
• Packaging
• Delivery of Warranties
Competitor Risk
• Pricing Strategy
• Market Share
• Market Strategy
b) OPERATIONS RISK
• Process Stoppage
• Health and Safety
• After Sales Service Failure
• Environmental
• Technological Obsolescence
• Integrity
▪ Management Fraud
▪ Employee Fraud
▪ Illegal Acts
c) FINANCIAL RISK
d) BUSINESS RISK
• Regulatory Change
• Reputation
• Political
• Regulatory and Legal
• Shareholder Relations
• Credit Rating
• Capital Availability
• Business Interruptions
a) FINANCIAL RISK
• Liquidity Risk
• Market Risk
▪ Currency
▪ Equity
▪ Commodity
• Credit Risk
▪ Counterparty
▪ Trading
▪ Commercial (Loans, Guarantees)
• Market Liquidity
▪ Currency Rates
▪ Interest Rates
▪ Bond and Equity Prices
• Derivative Risk
• Operation Risk
▪ Systems (Information Processing, Technology)
▪ Customer Satisfaction
▪ Human Resources
▪ Fraud and Illegal Acts
▪ Bankruptcy
• Regulatory Risk
▪ Capital Adequacy
▪ Compliance
▪ Taxation
▪ Changing laws and policies
• Environment Risk
▪ Politics
▪ Natural disasters
▪ War
▪ Terrorism
• Integrity Risk
▪ Reputation
• Leadership Risk
▪ Turnover
▪ Succession
ISO 31000 also suggests that once risks have been identified and assessed, techniques to manage
the risks should be applied. These techniques can fall into one or more of these four categories:
1. Risk Avoidance. This includes performing an activity that could carry risk. An example
would be not buying a property or business in order not to take on the legal liability that comes
with it. Avoiding risks, however, also means losing out on the potential gain that accepting
(retaining) the risk may have allowed. Not entering a business to avoid the risk of loss also
avoids the possibility of earning profits.
2. Risk Reduction. Risk reduction or optimization involves reducing the severity of the loss or
the likelihood of the loss from occurring. Optimizing risks means finding a balance between the
negative risk and the benefit of the operation or activity; and between risk reduction and effort
applied.
3. Risk Sharing. It means sharing with another party the burden of loss or the benefit of
gain, from a risk, and the measures to reduce a risk.
4. Risk Retention. It involves accepting the loss or benefit of gain from a risk when it occurs.
Self-insurance falls in this category. All risks that are not avoided are transferred or retained by
default.
4. Evaluate the effectiveness of the various steps in the assessment of the comprehensive risks
faced by the business firm.
5. Assess if the management has developed and implemented the suitable risk management
strategies and evaluate their effectiveness.
7. Assess management’s efforts to monitor overall company risk management performance and
to improve continuously the firm’s capabilities.
8. See to it that best practices as well as mistakes are shared by all. This involves regular
communication of results and feedbacks to all concerned.
9. Assess regularly the level of sophistication of the firm’s risk management system.