Imperatives of managing financial risk for organisational growth

For leaders in the 21st Century to grow their organisations to greatness, the need to have the capability to navigate in a very risky global village has been underscored.
 
Indeed, for banks and other financial institutions to be globally competitive also, their leadership must be strategically positioned to make a difference.
 
Experts are of the view that understanding and managing risks have become imperative for the success of organisations.
They argued that a banking system that is resilient should have the capacity to support the real economy, and contribute positively to sustainable economic growth and development through the medium and long term.

He noted that a variety of risks confront organisations, and any one of them could threaten organisation’s success, and ultimately lead to a decrease in shareholders’ value.
 
Besides, with an increase in cyber threats, Abdullahi said the need for greater risk awareness by the board and management is pertinent.
 
Abdullahi, represented at the event by one of the bank’s deputy director, E.H. Ezulu, maintained that disruption, innovation, technology, and big data required companies to rethink their business models, core strategies, and target markets.
 
For stronger governance structure and holistic risk management for organisations, he stressed that boards and senior management must have a heightened state of awareness.

He said: “The treasury function will focus on risks emanating from foreign currencies, interest rates, and commodities prices. An organisation’s insurance group will focus on hazard risks such as fire and accidents, while the information technology group would be concerned with security and systems risks.
 
“The accounting and internal audit function focus on risks caused by inadequate internal controls and trends in performance indicators. The executive management would usually have its eyes on the big picture of strategic risks facing the enterprise over its life. “As organisations grow in complexity and serve global markets, the boards’ challenge would be to understand fully how the various organisational units interact and relate, and in turn focus on how the risks cut across the organisation is mitigated.”