It was said that:"Good risk management requires good ethics; and good ethics require good risk

900 WordsApr 23, 20194 Pages
It was said that:"Good risk management requires good ethics; and good ethics require good risk management." Do you know the reason that good risk management and good ethics should work together? The report will begin with the definitions of these two fields. Firstly, Risk management is a process to make decisions which plan to minimize the business losses on an organization, and reduce the number or size of these losses. For ethics, it seems like a standard aiming to comply with certain rules or to achieve certain results in particular types of situations. Obviously, the relationship of them seems like two sides in one coin. Because an organization wants to manage its risks well, everyone who represents that organization must practice good…show more content…
Meanwhile, it is urgent to pay attention to the Ethics in the risk management and tighten the connection between the Ethics and risk management in commercial bank. Although risk is just a by-product of the financial trading, two parties of the trading are trying to get rid of it. However, ethics becomes the key factor in risk management. 3. Measurement Many companies define their risks during the business plan process, specifically during budgeting. A chief risk officer may call upon the heads of a company’s operating units and functional areas to prevent, detect, respond, evaluate, define. To identify financial risks associated with their business plans, Legal departments also tend to drive risk assessment because of the significance of financial costs of transgressing applicable laws and regulations. Legal- and financial-driven assessments are good starting points for the holistic approach required to meet new expectations for ethics. It is necessary to build a sustainable relationship between the ethics and risk management. Firstly, the office in charge uses existing knowledge of risks to design a questionnaire or interview process, which asks key business-unit employees to evaluate the prevalence of known risks. In the second iteration, the corporate ethics and team cross-references data gathered from interviews in the business units to build a profile of

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