Risk Management Program For The Small Community Bank

Effective planning & execution of risk assessment procedure in all financial & operating sectors to identify potential risk to organization.

As time has shown, financial institutions undertake an abundance of uncertainty causing unpredictable risk consequences. As a result, executives instill risk management programs to assist in managing the organizations risks so they align with the company’s goals. Commonly sought goals include legal and regulatory compliance, tolerable uncertainty, survival, business continuity, earnings stability, profitability and growth, social responsibility and economy of risk management operations. Through the implementations of goal oriented programs, an organization can effectively minimize risk uncertainty. All organizations including financial institutions encounter risks from each risk

Risk Management issues are often handled at the facility where the problem(s) exist. One of the duties of Risk Manager’s is to communication and collaboration between departments within an organization in question. In addition, to sinking risks, and cutting costs in order to promote process efficiency .By analyzing incident reports is one way to correct current problems, and future problem areas. Risk managers are also responsible for certain criteria that must be met in order for full participation in certain government and state reimbursement programs ("World Health Organization," “n.d.”). Risk Management is a structured approach to managing improbability, related to a risk, through a structure of human interaction.

Our implementation plan mainly focuses on five risks, which are compliance risk, strategic risk, credit risk, operational risk, and financial risk. The corporation has established risk management committees to assess and manage the corporation’s exposure to the above risks. Then, the committees will prioritize these risks and establish guidelines for risk management processes. After that, it will assign the management of some risks to appropriate operating departments or individuals. The management process and department control activities are monitored by the committee and board of directors. However, each individual within the company has responsibility to identify and report potential risks to their managers.

“Enterprise risk management (ERM) is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of an organizations capital and earnings.” (ERM2007-2018) There are differences in the way a healthcare organization might use Enterprise risk management compared to a non-healthcare organization. For instance in healthcare a ERM program could help the healthcare leaders focus on better management of patients safety risks as well as business risks and, in turn, it could increase value of the organization. It could help prevent financial loss or could aide that organization in the investment to expand the services offered by the health-care organization.

RBC engages a strong risk culture, with an understanding of risk awareness and responsibility. They use several methods to manage and alleviate their vulnerability to different types of risk. This bank’s risk-management process includes in-depth risk measurement, risk control, and risk governance, with setting the right risk culture at the top with their Board of Directors through their “Three Lines of Defence Model ,” (See Exhibit 4).

Risks are probabilities that could render a business to have lower than anticipated profits. This could be due to various and numerous factors. The identification, acknowledgement and acceptance of these risks are fundamental to every business, Coffeeville in particular. This report will outline CoffeeVille’s exisiting Risk Management Policy. It will also determine its effectiveness with regards to risk identification, management and control.

According to COSO "support from the board of directors and senior management is need to get the right focus, resources and attention for ERM" The entire corporation from top to bottom must view risk management as a critical and strategic step towards prosperity. And even though it is not the job of the directors to implement or be a part of risk management activities, they demonstrate clear support for ERM measures. It is up to top management to ensure that the resources are available, the focus is clear and the tone is positive and motivating.

Collier (2009) claims that the fundamental role of the Board of the directors in a company is to apply risk management and to review the performance of the organisations’ internal control procedures; these two principal processes will support the Board in the setting of the strategic targets, the transformation of the targets into real products and services, the effective business overseeing, and the realistic reporting to the external stakeholders. Apart from the Board, the author suggests that an effective risk management framework must be facilitated by a risk management group, a chief risk officer, external and internal audits, and a mature organisational culture disseminated to the line managers and employees. Under the same concept, Hampton (2009) presented a flow gram that suggests the path towards the establishment of enterprise risk management, starting from the risk recognition and ending to the standardization of a risk evaluation process, having prior involved the Board, the risk owners and the accountable staff.

For the community bank, goals are incorporated into the risk management program established by the CRO and management. To ensure the bank serves the local community, the identification and management of risks and loss exposures, in addition to, policies and procedures enable the institution to thrive. Tolerable uncertainty, legal and regulatory compliance, economy of operations, social responsibility are pre-loss goals, whereas, survival, business continuity, profitability and growth, and earnings stability are post-loss goals. The attainment of each risk management is addressed.

The risk manager is empowered by the governing body to implement the functions and activities of the risk management program with the assistance of the patient care and administrative staffs. The governing body has overall responsibility for the effectiveness of the program and providing the necessary resources. The governing body’s responsibilities are supported through regular written and verbal communications regarding risk management activities that may affect the organization’s finances.

J.P. Morgan Private Bank was one of the most successful banking services globally. It offered high-end financial products and services with professional risk management team. In financial crisis, the Private Bank successfully survived with relatively great performance. This paper would exposit the key to their success of risk management by answering six questions.

Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. (Lecture notes)Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001)

Every day businesses face the challenge of being exposed to potential risks. Whether these risks are internal to the company financially, damaged caused to the interior or exterior of the building itself, or lawsuits due to liability losses, businesses have a responsibility to be prepared. There are numerous ways for businesses to protect themselves from possible risks resulting from a loss. Risks may also vary depending on the type of business and operations it conducts. Not all companies will be faced with the same challenges of protection for losses, which is why it is important to consider a risk management process. Risk management is the identification, assessment, and prioritization of risks, followed by coordinated and economical

risk management operations of the company, to include the development of a financial and operational strategy, metrics tied to that strategy, and the ongoing development and