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Effective Risk Management for Board Members & Executives

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Effective Risk Management for Board Members & Executives

Since the global financial crisis, corporate board members and senior staff have been under pressure to enhance their understandings of risk management.

In the UK this has been formalized into law through the Corporate Governance Code, and similar measures are taking root across the globe. In particular, non-executive directors are now required by most large institutions to demonstrate some understanding of risk management to undertake oversight responsibilities.

This course is designed to help you understand how to respond to this challenge.

This course will walk participants through each of the essential processes of financial and operational risk management highlighting areas where they must be in a position to challenge the risk management function.

We then give considerable attention to the formation of the board’s risk sub-committee, discussing when it should take form, how it should make style and how it should function concerning the board’s audit committee in particular.

Participants should leave the course with some confidence that they understand the scope and purpose of risk management in their organization as well as with some ability to take a critical stance while executing their oversight duties.

In this 3-day course participants are shown:

• The intended role of directors and senior executives in overseeing, understanding and leveraging risk management
• The envisaged role of directors in light of the Walker Report, OECD reports, The Turner Review and other commentaries
• How to establish executive risk management committees
• How to establish a risk profile and risk appetite
• The purpose, process, and function of the core risk areas: credit, market and operational
• How to understand these risk exposures in relation to the company’s overall core business operations
• How information from these functions should be reported and technological and IT considerations
• Primary questions to ask of risk management heads during the oversight process
• How and when to form a risk committee
• How the risk committee should be structured and function in relation to other committees, particularly the audit committee
• Risk management within the context of major initiatives (e.g., Basel III and its Internal Capital Adequacy Assessment Process (ICAAP)

This course is endorsed by GARP.

You might be interested in another Management programs as a next step.

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  • View Schedule
  • COURSE TYPE Advanced
  • COURSE NUMBER
  • DURATION 3 days
  • COURSE ACCREDITED BY GARP

YOU WILL LEARN HOW TO

On completion of this innovative 3-day course, you will be able to:

-Gain a better understanding of the role of directors and senior executives in overseeing, understanding and leveraging risk management
-Understand the envisaged part of directors in light of the Walker Report, OECD reports, The Turner Review and other commentaries
-Learn how to establish executive risk management committees
-Learn how to create a risk profile and risk appetite
-Understand the purpose, process, and function of the core risk areas: credit, market and operational
-Understand these risk exposures in relation to the company’s overall core business operations
-Learn how information from these functions should be reported and technological and IT considerations
-Gain a better understanding of the primary questions to ask of risk management heads during the oversight process
-Learn how and when to form a risk committee
-Learn how the risk committee should be structured and function in relation to other committees, particularly the audit committee
-Understand risk management within the context of major initiatives (e.g., Basel III and its Internal Capital Adequacy Assessment Process (ICAAP)

IMPORTANT COURSE INFORMATION

Participants who fully attend this course and complete the test on the last day will receive a Strategic Axis Professional Certificate (SAPC). SAPC certificates are regionally recognized and can be quite valuable when applying for more senior roles within the organization or outside.

This course is credited by GARP – Global Association of Risk Professionals (GARP)

COURSE OUTLINE

Modules:

Module 1: Overview

What risk management is meant to do for the institution

  • Goals and objectives
  • Tools and device

How risk management is meant to work

  • How risk events are meant to be reported
  • How losses and exposures are meant to be addressed


The role of executives and board members in overseeing risk management

  • Risk management oversight
  • Forecasts of future problems and opportunities
  • How risk management can be used in strategy

Benchmarking your institution’s risk management effectiveness and quality to that of competitors

Important terminology (in relation to risk management methods, derivatives, market instruments and their function)

Important initiatives for financial institutions (Basel III, CAD II, Solvency II)

Module 2: How to undertake compliance with initiatives

ICAAP for executives

Benchmark examples

UK FSA guidelines

Samples from various regulators

Exploration of important contents

Executive Summary

Capital Adequacy determination

Capital Planning

Use of the ICAAP

How the ICAAP should be implemented & used at the board level

Module 3: Board Oversight of Financial Risk

Identifying and understanding FX exposure

Defining FX losses

Operational hedging vs. Financial Hedging

Formation of an executive sub-committee

Structuring of the FX risk management apparatus

Structuring reporting: How losses and exposure can be communicated to the board and senior managers

Establishing an FX Risk Management policy

Benchmarking practices

Gathering an understanding of the institution’s FX risk profile

Tools for assessing FX exposure

Tools for monitoring and managing FX exposure

FX Model testing and Backtesting: What executives and the board needs to know in interpreting the results

Glossary of important FX terms

Module 4: Overseeing Credit Risks

Identifying and understanding credit risk exposure

Defining Credit losses

Corporate Credit versus Financial institution credit

Formation of an executive sub-committee

Structuring of the credit risk management apparatus

Structuring reporting: How losses and exposure can be communicated to the board and senior managers

Establishing a Credit Risk Management policy

Benchmarking practices

Gathering an understanding of the institution’s Credit risk profile

Tools for assessing Credit exposure

Client and customer ratings

Trade-credit ratings

Tools for credit monitoring

Establishing the monitoring function

Evaluating the monitoring function

Costly initiatives that must be considered

Data quality and database development

Information technology considerations

Personnel and human resource considerations

Credit model testing and stress testing: What executives and board members need to know in interpreting and using the results

Deciding how much in terms of resources to dedicate to credit risk management

Glossary of important credit terms

Module 5: Overseeing Funding and Liquidity Risks

Identifying and understanding liquidity risk exposure

Defining liquidity-related losses

Formation of an executive sub-committee and collaboration with ALCO

Structuring of the liquidity risk management apparatus

Structuring reporting: How losses and exposure can be communicated to the board and senior managers

Establishing a Liquidity Risk Management policy

Benchmarking practices

Gathering an understanding of the institution’s Liquidity risk profile

Tools for assessing Liquidity risk exposure

Tools for liquidity risk monitoring

Glossary of significant liquidity risk related terms

Module 6: Overseeing Hazard/Operational Risk

Understanding operational risk importance

Operational risk exposures

Hazards and vulnerabilities

How items excluded from the operational risk definition affect executive decision-making

Formation of an executive operational risk committee

Creation of functional risk policy and management manual

Additional terminology

Regulatory initiatives for financial institutions (Basel II, Standardised, and Advanced Measurement Approaches)

Establishing an executive risk tolerance level for operational risk exposure

Gathering the tools for operational risk management

Data considerations

Personnel considerations

Information technology considerations

Governance considerations

Deciding what operational risk approaches to take

Determining how much regarding resources to dedicate to executive risk management

Module 7: Overseeing Strategic Risk

Identifying and understanding Strategic/Competitive risk exposure

Defining Strategic losses

Reconciliation with operational risks and other risks

Structuring of the strategic risk management apparatus

Structuring reporting: How failures and exposure can be communicated to the board and senior managers

Establishing a Strategic Risk Management policy (if necessary)

Benchmarking practices

Gathering an understanding of the institution’s Strategic risk profile

Tools for assessing Strategic risk exposure

Apparatus for monitoring and managing Strategic risk exposure

  • In The Classroom

  • Live, Online

  • Private Team Training

  • Indiviual Private Session

Please Register for More Information

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