Risk Management Practices As Part Of Their Credit Rating Analysis Essay

1810 Words8 Pages
Over the last decade, there has been an increased interest in risk management. Stakeholder’s expectations regarding risk management have increased rapidly, especially since the recent financial crisis (2008). Due to that crisis, weaknesses in risk management practices became visible, and companies are currently under significant pressure to strengthen their risk management practices and to take proactive role to reduce business risks.
This pressure is boosted by regulators, professional associations, stock exchanges, international standards organizations, and consultants promulgating new risk management rules and requirements. Moreover, credit rating agencies like Standard & Poor’s have begun to evaluate firm’s risk management practices as part of their credit rating analysis.
In the wake of this wake these increasing interest and demand, the idea of enterprise risk management has gained substantial force as a potentially effective response to ERM challenges. The term enterprise in enterprise risk management itself shows a different meaning than silo-based traditional risk management. Silo-based means thinking in containers, some departments of a company do not share information with other departments. The opposite of this silo approach is an integrated view that considers risk from the perspective of the whole organization, which is called Enterprise Risk Management (ERM) (Connair & Stephen, 2013) .
1.1 Research objectives
The researcher’s main aim from her study is to

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