Risk and Governance A Framework for Banking Organisations

Author: Sergio Scandizzo
Publisher: Risk Books
ISBN: 9781906348878
Published In: April 2013
Format: Paperback
Jurisdiction: International ? Disclaimer:
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Risk and Governance: A Framework for Banking Organisations examines the relationship between risk management and governance, both of which are at the heart of any corporation. Sergio Scandizzo addresses the manifold ways in which they both function in that most complex of corporations – the bank.

Governance is defined as the way in which a company is controlled, through principles like the equitable treatment of shareholders, the protection of the interests of stakeholders, the ethical behaviour of the board, and the transparency and accountability of both management and the board. It is at the centre of any complex management system which enables a financial institution to function, a system which becomes even more complex when the corporation or company in question is a bank. Such institutions have huge numbers of people sharing in both risks and rewards, thereby implicating many more people in its decisions and potential losses.

A methodology which puts the relationship between risk management and governance at the centre of banking best practice has not yet been established. Risk and Governance: A Framework for Banking Organisations articulates the necessity of devising a new system of risk management which can cope with extreme conditions, examining the intrinsic limitations on governance, the role and evolution of risk management, and the strategies for best practice. Sergio’s contention is that risk management must become the key function of governance and the responsibility of the Board.

This book details the confluence of risk management activities and corporate governance mechanisms in modern banking into one integrated practice. It argues that the two processes, thus far confined respectively to the boardroom and to the back office, are inextricably linked, that their goals are complementary and that one cannot function without the other.

Risk and Governance: A Framework for Banking Organisations analyses the evolution and current thinking behind corporate governance, the rationale behind risk management - how it functions, why we need it, all potential risks faced by banks and the current models used to contend with them – and the necessity of using new models and strategies for banking best practice and corporate governance.

Key chapters include:

The Nature of Corporate Governance in Banking
The Mission, Organisation and Governance of Risk Management
Operations Risk in Extreme Market Conditions
Managing Reputational Risk
A Framework for Risk-Bearing Governance

Risk and Governance: A Framework for Banking Organisations is essential for anyone involved in the organisation and management of risk in a banking environment, from board members, directors, risk managers and regulators, to auditors, consultants, practitioners, and senior members of staff with the power to make strategic decisions.

Introduction: The Confluence of Risk and Governance

Part 1: Corporate Governance in Banking

Chapter 1: Corporate Governance, Information and Control

Chapter 2: The Nature of Corporate Governance in Banking

Chapter 3: Regulation and Governance

Part 2: Modern Risk Management

Chapter 4: The Mission, Organisation and Governance of Risk Management

Chapter 5: A Cartography of Banking Risks

Chapter 6: Operations Risk in Extreme Market Conditions

Chapter 7: Managing Legal Risk

Chapter 8: Managing Reputation Risk

Part 3: Current Practices in Banks

Chapter 9: Drawing Boards: Motivations and Responsibilities in the Boardroom

Chapter 10: Executive Compensation: Performance, Regulation and Ethics

Chapter 11: Fair Value, Auditing and Internal Controls

Chapter 12: A Framework for Risk-Bearing Governance

Conclusions

Sergio Scandizzo is the author of The Operational Risk Manager’s Guide, now in its second edition, and of Validation and Use Test in AMA, both published by Risk Books. Sergio was also a contributing author to the award-winning Risk Books title Advanced Measurement Approach to Operational Risk, edited by Ellen Davis. He is also Associate Editor of The Journal of Operational Risk and the author of several journal papers on fuzzy logic, genetic algorithms and risk management.

Sergio is currently Deputy Advisor at the European Investment Bank (EIB) in Luxembourg. Prior to his position at the EIB he was a principal in the London office of PricewaterhouseCoopers and, prior to that, a senior manager of the Operational Risk Group at the Canadian Imperial Bank of Commerce in Toronto. He holds degrees in computer science and finance.