The Energy & Resources Industry is highly asset-intensive. Companies that manage these assets are typically confronted with regulatory compliance, safety and environment threats as well as aging equipment, maintenance issues, and budget limitations. These factors can have an impact on the operational, external, and strategic success of an organization.
A well-rounded approach to risk management is crucial to guard against these risks and ensure that a business will remain in a position to meet its customers’ demands. This article highlights key areas of risk and asset management:
Counterparty risk management focuses on ensuring that the relationships with key players (such as prime brokers and derivative counterparties, as well as clearing banks and custodians) are reliable and creditworthy, and it includes implementing security measures that guard against reputational or financial damage caused by the insolvency of those partners. This is accomplished by vetting suppliers and ensuring that the process https://expertalmanagement.de/2021/06/19/die-vorteile-der-nutzung-eines-datenraums-fur-due-diligence of approval extends not only to the vendor, but also to the particular service they provide.
Market risk is the possibility of a decline in portfolio value. Asset managers as well as risk management are concerned about this, but from different perspectives. Portfolio managers focus on managing their exposure to markets to reduce unintended market and factor bets, whereas risk managers seek to manage crowded leverage and trades, as well as to examine liquidity and cash flow.
A strong program for managing risk and assets is crucial to avoid unexpected challenges and maximising the impact of an organization’s assets. The three-line governance framework is a potent tool for identifying and minimizing the risks that could negatively impact an organization’s performance.