Chapter 2

Question 1

What is the definition of a stakeholder

Answer 1

A stakeholder is any individual, group or organisation that can affect, be affected by, or perceive itself to be affected by, a risk

Question 2

Who are the stakeholders of an organisation

Answer 2

Employees
Suppliers
Customers and other recipients of the service
Distributors
Regulators
Media
Private investors
Banking industry
Quoted shareholders
Business partners
Environment
others

Question 3

In addition to upholding the interests of stakeholders, what considerations must an organisation take

Answer 3

Safety of people
Safety of assets
Revenue and cash flow
Legal obligations
Delivery of promised goods and services

Question 4

An organisation has a number of legal obligations which may involve issues such as

Answer 4

Regulatory and licence approvals
Contractual liabilities
Environmental responsibilities
Fines and penalties emerging from criminal law
Expenses arising from litigation by employees and third parties
Other statutory responsibilities

Question 5

What are the six categories of global and political risks

Answer 5

Global economic risks
Global environmental risks
Global social risks
Global technology risk
Geopolitical risk
Political risk

Question 6

Define:

Global economic risks

Answer 6

Global economic risks are financial issues that affect particular market sectors or global trading environments.
E.g. oil price fluctuations, reduction in Chinese economic growth or world banking crisis

Question 7

Define:

Global environmental risks

Answer 7

Global environmental risks can be natural phenomena, weather related or the consequence of man-made activity. Hurricanes, tsunamis, earthquakes as well as effects of climate change.

Question 8

Define:

Global social risks

Answer 8

Global social risks arise from the ease with which people and ideas move around the world. Worldwide TV, phone, radio, internet allows global discussion; mass travel facilitates pandemic outbreaks; censorship from gov’ts, etc.

Question 9

Define:

Global technology risk

Answer 9

Global technology risk would describe events such as internet or satellite failure leading to the breakdown of commercial distribution and customer service facilities (e.g. data fraud, data loss, electromagnetic fields, toxicity of nanoparticle devices or genetic engineering mutations)

Question 10

Define:

Geopolitical risks

Answer 10

Geopolitical risks arise when several nations disagree causing tension and the risk of armed conflict, or where a particular nation’s philosophy and behaviour is seen as a general threat to others (Israel-Palestine; terrorism; atomic weapons and transnational crime and corruption)

Question 11

Define:

Political risks

Answer 11

Political risks can be defined as risks that stem from political activity by governments, but are not likely to provoke widespread immediate and united opposition. They may arise from economic or social decisions