AC 1204 ( Strategic risk refers to the internal and

Group 6 | Reporting Script external events that may make it difficult, or

Scheduled Date: February 28,2022 even impossible, for an organisation to achieve
their objectives and strategic goals. These risks
can have severe consequences that impact
TOPIC: Risks Associated with Corporate organisations in the long-term )
Governance
A. Strategic Risk ----------------------- next slide -------------------------------
B. Reputation Risk
Picture// how to identify strategic risks
C. Compliance Risk
D. Operational Risk ----------------------- next slide -------------------------------

Leader: Pongase, Elaiza Jayne M. EDEL: Here are some examples of strategic risk…
read

Members: Some examples of strategic risk include:

Alcantara, Julianna Marie, P.
Borbon, Richiel B.
Librado, Edelweiss R.
Salimbagat, Grace Sheill M.
Elaiza
Introduction:
Good afternoon, blockmates, good
afternoon Miss! Before we further start our group
presentation, may your ash Wednesday be a time
of reflection, and promise. For this is the time that
we remember the greatest sacrifice.
In the whole duration of this report we will talk
about certain “Risks”
To start off, we all know that a degree of
risk is inevitable in business operations. To obtain
higher returns, innovate and secure market
leadership one may need to adopt a higher risk
strategy. Because not innovating and being risk
averse can result in the stagnation of the
enterprise.
The Board should establish and
communicate its risk appetite // and agree to the
level of risk it is prepared to accept in different
areas of corporate operation.
They need to ensure effective processes//
and practices are in place for the identification and
management of risks.
Corporate systems and processes need to
be sufficiently resilient to be able to withstand the
simultaneous materialization of multiple risks.
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In this regard, this presentation you will able to
understand the risks associated with corporate
governance, specifically:
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the strategic risks, reputation risk, compliance risk,
and operational risks.
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Edwelweiss
A. Strategic Risk in Corporate Governance
EDEL: Good morning everyone so char… read
 Technological changes.
 Senior management turnover.
 Merger integration.
 Stakeholder pressure.
 Competitive pressure.
 Consumer demand shifts.
 Consumer preferences changes.
 Regulatory changes.
EDEL:Strategic risks arise when a business
strategy fails to deliver the expected outcomes,
affecting the firm's development and
growth.Strategic risk includes risk relating to the
long-term performance of the organisation. This
includes a range of variables such as the market,
corporate governance and stakeholders. The
market is highly variable and can change at
relatively short notice, as can the economic
characteristics of the country or countries in which
a given organisation is operating The corporate
governance risk of the organisation includes risk
relating to the reputation of the organisation and the
ethics with which it operates. 
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( Strategic Risk relates to risk at the corporate
level, and it affects the development and
implementation of an organisation's strategy.
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An example is the risk resulting from an
incorrect assessment of future market trends
when developing the initial strategy. In
developing a strategy, an organisation makes
an assessment of market conditions today. It
then goes on to forecast the various changes
that will occur in the market over a period of
time. )
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EDEL : Here are 5 types of strategic risk … read
and give examples which can be seen in the 2nd
pic
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Grace
B. Reputation Risk in Corporate Governance
Reputation Risk is a threat or danger to the good
name or standing of an entity. It has to do with
negative publicity of an institutions.
- Reputation risk affects the institution’s ability
to establish new relationships or services or
continue servicing existing relationships.
This risk may expose the institutions to litigation,
financial loss, or a decline in its customer base.
Reputation risk exposure is present throughout the
organization and includes the responsibility to
exercise an abundance of caution in dealing with
customer and the community.
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Types of Reputational Risk
The following are the real-world scenarios and
business experiences that can cause serious
damage to the institution’s reputation.
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Reputation risk occur as the result of direct
actions such as:
1. Direct actions of your company and
company practices
Example:
 fraud
 bribery
 organizational change (new
management structures handling the
entity so there’s an introduction of
new strategies and commercial
agreements)
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 processes of new products, markets
and acquisitions all cause change or
poor-quality products and services.
 People hiring new employees, losing
key people, poor succession
planning, or weak people
management can all create
dislocation. Poor working conditions
for employees and exploitative
working conditions
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2. Actions of employees, or
partners/suppliers that directly
represents your business or has
relationship with your business.
Example:
 Individual employee, partners or
suppliers engage in misconduct
towards costumer
 Employees involved in misconduct
that becomes publicly known
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 Employees and partners or suppliers
engaging in unethical conduct
 Negative social media post or
feedback of anyone who is
associated
 Partners or suppliers speak
negatively about your business
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3. As a result of external, like customers.
Example:
 Negative social media posts from
consumers about their experience with
your business
 Negative reviews left by customers on
public review sites, especially if based
on false experiences
 Negative articles and press
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(Another major source of reputation risk is poor
coordination of the decisions made by different
business units and function where performance
does not match the institution’s expectation.)
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Richiel
C. Compliance Risk in Corporate Governance
Compliance risk is an organization’s potential
exposure to legal penalties, financial forfeiture, and
material loss, resulting from its failure to act in
accordance with industry laws and regulations,
internal policies, or prescribed best practices.
Compliance risk is also known as integrity risk.
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Common types of Compliance Risk
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1. Environmental risk- potential damage to
living organisms or the environment arising
out an organization’s activities.
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2. Workplace Health & Safety- risks related all
aspects of health and safety in the
workplace such as accidents or repetitive
strain injuries.
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3. Corrupt practices – the potential for corrupt
practices such as bribery or fraud.
Organizations are generally responsible for
the actions of their employees and agents in
this regard.
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4. Social responsibility- The risk is that your
business activities will harm your workers or
the people in the communities in which you
operate.
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5. Quality- Releasing a low quality product or
service that fails to meet the expected level
 of due diligence in your industry or that
violates laws and regulations.
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6. Process Risk – The risk that your processes
will fail resulting in legal violations such as
failure to meet your responsibilities to your
customers or partners. Process failures can
also result in reporting or accounting errors
that breach your duties to your investors.
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Compliance risk for example is buying something
after being persuaded by a pushy salesperson or
trying a particular brand of clothes after seeing a
commercial endorsement featuring your favorite
celebrity are two examples of what is known as
compliance.
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Julianna
D. Operational Risk
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( Operational risk is the risk to current or projected
financial condition and resilience arising from
inadequate or failed internal processes or systems,
human errors or misconduct, or adverse external
events. )
So operational risks are the uncertainties and
threats faced by a company in its regular business
activities. And these operational risks are caused
by various factors, it can be both internal as well as
external.
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The following are types of operational risks.
These operational risks that disturb the normal
business process can end up in financial loss or
damage to the business operations and image of
the company. As we continue on the next slides, let
us discuss thoroughly these operational risks.
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First type of risk is human error
#1 Human Error
These errors are caused by employees of
the organization that can affect the operational
activities and may even cause financial loss. This
error is caused by various factors like lack of skill
set, incomplete information, lack of understanding
and knowledge, genuine input error, etc. Though
these errors are caused inadvertently it may affect
the business activities. (E.g.) Excess payment
made by the cashier by mistake.
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Second type of risk is technical error
#2 – Technical Error
Technical or system errors can affect
business operations like system failure, system
crashes, connectivity issues, system slowdown,
errors caused by software applications, etc.
Technical defects can bring out a wrong output and
it is tough to identify and rectify it. (E.g.) Wrong
interest calculation on loan done by banking
software.
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Third type of risk is gap in flow.
This type of error is when information…
#3 – Gap in Flow
Sometimes, information is missing from the source
itself because of data lag or restrictions. In such
cases, the output gets affected.
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Fourth type of risk is uncontrollable events
#4 – Uncontrollable Events
Few events are uncontrollable, and it will also affect
business operations like political changes, weather
changes, economic scenarios, technological
advancements, etc. These factors can bring an
impact on
operational activities and can affect revenue and
profitability and put the organization at risk. (E.g.) A
change of ruling party will impact the government
project execution and it may affect the contractor.
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And the last risk is the intentional frauds
#5 – Intentional Frauds
In certain cases, intentional frauds are done by
internal people to the organization. Every
organization has standard rules and regulations for
employees for removing conflict of interest and
fraudulent activities.
Fraudulent activities can cause financial loss and
damage the reputation of the organization. (E.g.)
An employee makes a deal with a supplier for
purchases and enjoys commission from the
supplier.
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On the data presented, we can conclude that
The Operational Risk practice assists organizations
in transforming their approach to utilizing people,
third-party connections, technology, data, business
processes, and controls in order to counteract
operational risks and enhance organizational
performance.
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The practice assists organizations to develop ----------------------- next slide -------------------------------
integrated, strategically-aligned risk management
There’s an alternative way to manage and mitigate
solutions that allow the management to make
damage to your reputations through the following:
optimized business decisions and drive them
towards becoming truly risk-intelligent enterprises. - Protect Yourself from Data Breaches
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mishaps and keeping employees in good
Effects due to operational risks may create condition and treating well the customer and
irrecoverable losses. employee to prevent reputation risk.
(bali ang keeping employeers chuchu ako e
It creates damage to the brand name to the
sumpy lng sa be vigilant nga part para one
employee as well as to the organization. It can lead
statement na sha.)
to lifetime losses and trust in the market for such
- Making values truly operational
employees and/or the organization.
- Mindful of ethical conduct
- Manage external reputation risk
Grace
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Practical Guidelines in Reducing and Managing
& Elaiza
Risks
Moving forward, another way of managing risks is
Once reputation risk has been identified and by..
assessed then practices to manage and reduce the
Risk Sharing- or “risk distribution”
risks should be applied. Reputation risk is mitigated
by investing in product brand development, - means sharing with other party the burden
investing in corporate brand development, of damage or the benefit of gain from the
monitoring the use of brands, monitoring supplier risk. (if an entity can’t handle the risk then
and customer business practices, performing its time for them to ask for help or share the
community outreach, and handling stakeholder burden to the others that can probably
relations assist them)
----------------------- next slide ------------------------------- - This arrangements diminish individuals’
vulnerability to // uhm probabilistic events
The following categories are the ways in managing that negatively affect their financial situation.
risk:
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Lastly,
Risk Avoidance- is an action and approach in
eliminating that includes performing an activity that Risk Retention-
could carry risk. From the word ‘retention’ it is the act of retaining
This simply means avoiding possible risk, however Risk retention is actually a planned and a practice
it also means losing out on the potential gain that of setting up acceptance of losses, or benefit of
retaining the risk may have allowed. gain from a risk when it occurs.
- Controlling the process and understand all ( The goal of this approach is to do what’s best for
actions that can affect public perceptions everyone involved //which requires careful planning
- Understand stakeholder expectations (Don’t and decision making. )
try to set expectations to high by promising
offers that cannot follow up- this will backfire
when you become known as an organization And that basically concludes our report in relation
that cannot live up to its word-negative to risks associated with corporate governance, for
feedback) the next segment is the q& a portion which will be
- Focus on positive image, create response facilitate by Julianna.
and contingency plans (customer service
sending out positive communications,
transparency, good governance, and steady
growth are some of the most important
messages its key to consistently send out.)
(After stating the example)
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Risk Reduction- an action that reduce the severity
of the loss or the likelihood of the loss from
occurring.
This is finding a balance between the negative risk
and the benefit of the operation or activity; and
between risk reduction and effort applied.