Strategic Thought

Disciplines of RM >

 Corporate Finance

Organizations typically serve the interests of widely dispersed stakeholders – investors, customers, governments, community members, employees, suppliers, citizens. In so doing, organizations need to be aware of and address the perspectives of those stakeholders relative to risk.

The M & A due-diligence risk review uncovers undisclosed and unanticipated exposures and liabilities that an acquiring organization may inadvertently assume in a merger or acquisition. It also determines the competency of the acquiring and acquired organizations’ risk management programs, which can suggest opportunities to improve protection and achieve cost savings after the merger or acquisition is completed.

A portfolio view of due diligence, transaction solutions and environmental functions within one ERM solution increases efficiency and communication during a transaction.
By identifying potential areas of risk exposure, both vendors and purchasers can formulate mitigation strategies and forecast the level of contingencies needed.

Benefits that Risk Management can bring to Corporate Finance:

• Enforce controls and procedures to minimize rogue investments or transactions.
• Give board members the appropriate touch points to assess and understand the level of risk and control provision to help them have more detailed knowledge of all aspects of complex financial transactions. Leads to more informed and quicker decisions based on a risk/opportunity adjusted view. This allows for an assessment of whether the risk level is appropriate for the company and its objectives.