1.1 The global risk environment Flashcards
Organisations exist as a necus of ____________ including employees, suppliers, creditors and shareholders.
stakeholders
Effective risk management can add significant value for an organisation’s stakeholders. V____ is create by helping an organisation to achieve its objectives and protecting risk averse shareholders from financial or physical h___
Value
harm
Despite the value enhancing benefits of risk management, organisations do not always invest the level of r_________ necessary to ensure effective risk management. This is because different stakeholder groups can have different risk p_________. Only some groups are risk averse, others can be risk neutral, or even risk preferring in certain contexts (notably shareholders).
resources
preferences
C________ can exist between stakeholders where their preferences for risk differ. In particular, an organisation may not value risk management activities aimed at reducing risk where investors and well-diversified, limited l________ shareholders.
Conflicts
liability
Risk management regulation is used to help manage the conflicts that can exist between stakeholders. Although market forces can be used to help resolve c_______, imperfections exist in these forces, notably a___________ information and public good problems.
conflicts
assymetric
Risk management regulation is common in areas such as e___________ protection, health and safety and financial stability. Regulation may be country specific but i__________ regulation is very common in the 21st century.
environmental
international
International regulation is often p_________-based and r___-based. This allows it to be adapted to different situations and organisations.
principles
risk
In addition to international regulations, a range of international s_________ exist for risk management. The aim of these standards is to improve to e__________ of risk management in organisations around the world.
standards
effectiveness
