Publication: Risk Management : So Critical, yet So Elusive
Loading...
Published
2008-11
ISSN
Date
2012-08-13
Author(s)
Editor(s)
Abstract
Every good organization around the globe firmly espouses the benefits of sound risk management. Certainly, the recent financial crisis has underscored this imperative. Yet it is remarkable how elusive an effective risk management function can be for many organizations. This is definitely the case for many of the companies the authors have worked with as part of the corporate governance program in the Middle East and North Africa (MENA) region. This smart lesson is based on the recent work with an investee company to help put in place a simple but effective enterprise risk management process. This was part of a wider corporate governance improvement effort for the company. It also draws on experiences we've had with other companies and provides lessons for any organization trying to figure out how to actually make risk management work.
Link to Data Set
Citation
“Razook, Chris. 2008. Risk Management : So Critical, yet So Elusive. IFC Smart Lessons Brief. © World Bank. http://hdl.handle.net/10986/10581 License: CC BY-NC-ND 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication Taking Advantage of a Window of Opportunity(International Finance Corporation, Washington, DC, 2017-02)Rwanda’s government and private sector took a bold step towards achieving a critical reform agenda with the design and implementationof a single window for international trade system. This implementation marked the first successful collaboration among Rwanda’s numerous agencies that over see the country’s cross-border trade. Addressing the demands of a diverse group of stakeholders was certainly daunting, but effective stakeholder engagement and change management efforts have produced results that are exerting a major impact on the efficiency of goods into and transiting Rwanda. Driving the Single Window project was an aspiration for greater collaboration at the level of government-to-government, business-to business and government-to-business. Rwanda’s membership in the East African Community, which is a Single Customs Territory was another critical factor. By addressing national needs and incorporating a regional focus and outreach in the management of cargo, the Rwanda Electronic Single Window has achieved success.Publication Opening Opportunities(International Finance Corporation, Washington, DC, 2017-02)One of the most challenging experiences for businesses involved in cross bordertrade along Kenya’s border points is the clearance of imports and exports. Until 2015, the process of clearing cargo was largely manual. More than 29 different government agencies with different roles in the clearance of international trade goods required businesses to apply for and submit different sets of cargo clearance documents. The World Bank Group’s trade and competitiveness team, through the Kenya investment climate program, has supported the government of Kenya in implementing the Kenya National Electronic Single Window System, also known as the Kenya TradeNet System. This smart lesson describes the system, how it works, its accomplishments, and lessons learned along the way.Publication PortNet in Morocco(International Finance Corporation, Washington, DC, 2017-01)In 2008, Morocco’s National Ports Agency launched a project to create a national single-window platform for Morocco’s foreign tr ade. The process was long and difficult, and its success is owing in large part to the leadership and focus demonstrated by PORTNET S.A., the company created in 2012 to be in charge of the project. This SmartLesson describes the steps PORTNET took to forge a strategic alliance between public and private stakeholders in Morocco to achieve a common, mutually beneficial aim: streamline Morocco’s foreign trade procedures and improve its business climate.Publication Jamaica’s Trade Facilitation Task Force(International Finance Corporation, Washington, DC, 2017-02)Jamaica is taking steps to strengthen its trade environment as a way to improve the ease and ways of doing business and stimulate growth. In February 2015, Jamaica formed its National Committee on Trade Facilitation, known as the Trade Facilitation Task Force (TF2). During its first year, theTask Force had fruitful consultations with its members in the public and private sectors on how to increase trade facilitation in Jamaica. These consultations laid the foundation for the creation of a Trade Facilitation Project Plan, currently in use as a guide for the execution and monitoringof Jamaica’s trade-competitiveness activities. This SmartLesson describes the establishment of the Task Force and the progress of the Project Plan— and shares key lessons learned along the way.Publication Walking the Last Mile(International Finance Corporation, Washington, DC, 2017-02)Albania’s authorized economic operators (AEO) program is not yet operational, even though the country has adopted the necessary European Union (EU) legal and regulatory frameworks. This smart lesson outlines shortcomings in the adoption of AEO provisions under the European community customs code (CCC) as well as the obstacles the national government has faced putting in place the complementary reform measures necessary to ensure practical effectiveness. Lessons learned from the Albanian experience may be instructive for other countries in the central European free trade agreement region as they look to operationalize their AEO programs without diverting from AEO guidelines as set out in the EU acquis.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication A Risk Management Approach to Climate Adaptation in China(World Bank, Washington, DC, 2013-06)This discussion paper provides the analytical backdrop for a series of papers on managing climate- and weather-related risks in China. It reviews and synthesizes the growing literature on risk-based management approaches to climate change adaptation and offers guidance on a process for decision making. Managing risks from severe weather, present-day climate variability, and future climate change is integral to China's development. While the effects of future climate change are deeply uncertain, this uncertainty should not preclude action. Risk management is in essence a process for designing, implementing, and evaluating policies in the face of such uncertainty. The paper begins by defining key concepts and establishes the context for climate risk management and adaptation in China. It then outlines a step-by-step process for a risk centered approach to adaptation. The focus of the process is on planning for adaptation, not policy implementation. The papers that follow in the series take the general framework set out by this paper and apply it to different sectors, including transportation, water utilities, urban planning, and forestry.Publication Analyzing and Managing Banking Risk : A Framework for Assessing Corporate Governance and Financial Risk Management, Second Edition(Washington, DC: World Bank, 2003-04)This publication aims to complement existing methodologies by establishing a comprehensive framework for the assessment of banks, not only by using financial data, but also by considering corporate governance. It argues that each of the key players in the corporate governance process (such as shareholders, directors, executive managers, and internal and external auditors) is responsible for some component of financial and operational risk management. Following a holistic overview of bank analysis in Chapter 2, the importance of banking supervision in the context of corporate governance is discussed in Chapter 3. This chapter also considers the partnership approach and the emerging framework for corporate governance and risk management, as well as the identification and allocation of tasks as part of the risk management process. The framework for risk management is further discussed in Chapters 4 through 11.Publication GDLN Seminar on Strengthening Disaster Risk Management in East Asia and the Pacific : Volume 5. Community-based Disaster Risk Management(Washington, DC, 2009-06)In the GLDN seminar, the recovery procedures in the aftermath of the Kobe earthquake and the Asian tsunami were discussed. This introduction to Catastrophe Risk Financing Frameworks seminar provided participants with an understanding of catastrophe risk financing frameworks. In addition, it informed participants of new product lines in risk mitigation and risk finance and transfer and shared experiences of Bank-financed projects, including Turkey's Catastrophic Insurance Pool.Publication A Framework for Managing Government Guarantees(World Bank, Washington, DC, 2020-05)Managing government debt guarantees is difficult because the potential costs of guarantees are hard to estimate and typically do not show up in the reported budget deficit. A good framework for managing guarantees can, however, help governments overcome the difficulty and enhance the transparency of guarantees. This paper sets out a checklist of issues for a government to consider when designing or revisiting its framework for managing guarantees. The checklist comprises: (1) steps to establish macroeconomic control over guarantees by setting limits on their use and restricting the authorization to grant them; (2) steps to improve decisions to grant individual guarantees by means of guidelines, restrictions, conditions, cost estimation, guarantees fees, and a structured process for making the decisions; and (3) steps to ensure careful management after the granting of guarantees, including the recording and reporting of guarantees, arrangements to pay when necessary, and learning from past experience.Publication GDLN Seminar on Strengthening Disaster Risk Management in East Asia and the Pacific : Volume 3. Local Government Approaches to Disaster Risk Management: Climate-Resilient Cities(Washington, DC, 2009-03)In the GLDN seminar, the recovery procedures in the aftermath of the Kobe earthquake and the Asian tsunami were discussed. This introduction to Catastrophe Risk Financing Frameworks seminar provided participants with an understanding of catastrophe risk financing frameworks. In addition, it informed participants of new product lines in risk mitigation and risk finance and transfer and shared experiences of Bank-financed projects, including Turkey's Catastrophic Insurance Pool.
Users also downloaded
Showing related downloaded files
Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication FY 2025 China Country Opinion Survey Report(Washington, DC: World Bank, 2025-08-04)The Country Opinion Survey in China assists the World Bank Group (WBG) in better understanding how stakeholders in China perceive the WBG. It provides the WBG with systematic feedback from national and local governments, multilateral/bilateral agencies, media, academia, the private sector, and civil society in China on 1) their views regarding the general environment in China; 2) their overall attitudes toward the WBG in China; 3) overall impressions of the WBG’s effectiveness and results, knowledge work and activities, and communication and information sharing in China; and 4) their perceptions of the WBG’s future role in China.Publication The World Bank Group in Tanzania, Fiscal Years 2012–22(Washington, DC: World Bank, 2025-07-22)This evaluation assesses the relevance and effectiveness of the World Bank Group's support to Tanzania between Fiscal Years 2012 and 2022. Over the past decade, Tanzania has experienced resilient growth, with an average annual per capita GDP increase of 2.2%. However, poverty remains widespread and slow to decline, underscoring the need for more inclusive growth. The report examines the Bank Group's strategic and operational approaches during this period, which were aligned with Tanzania's development priorities and focused on industrialization, human development, and public sector reforms. The evaluation includes thematic chapters on the Bank Group's support for private sector-led growth and spatial transformation, as well as lessons to inform future support to the country.Publication FY 2024 Seychelles Country Opinion Survey Report(Washington, DC: World Bank, 2025-01-27)The Country Opinion Survey in Seychelles assists the World Bank Group (WBG) in better understanding how stakeholders in Seychelles perceive the WBG. It provides the WBG with systematic feedback from national and local governments, multilateral and bilateral agencies, media, academia, the private sector, and civil society in Seychelles on: (1) their views regarding the general environment in Seychelles; (2) their overall attitudes toward the WBG in Seychelles; (3) overall impressions of the WBG’s effectiveness and results, knowledge work and activities, and communication and information sharing in Seychelles; and (4) their perceptions of the WBG’s future role in Seychelles.Publication The World Bank Group in Georgia, 2014-23(Washington, DC: World Bank, 2025-07-30)This Country Program Evaluation assesses the performance and effectiveness of the World Bank Group’s support to Georgia in achieving the country’s development objectives. In the decade leading up to the evaluation period, Georgia pursued economic reforms to attract critical investments for becoming a regional trade and transport hub. Ambitious economic reforms went hand in hand with efforts to improve human development and strengthening social protection systems. Growing geopolitical tensions and internal political polarization have challenged Georgia’s reform progress in recent years. The Bank Group’s strategy adapted well to Georgia’s development needs and was well coordinated with other development partners. It successfully employed a range of instruments to help increase competitiveness, growth, and job creation, and effectively contributed to improved infrastructure and increased trade by using programmatic and innovative approaches. The Bank Group’s regular investments in analytical work and the switch to results-based programmatic support helped improve the efficiency and effectiveness of education and health care systems. The IEG offers the following lessons based on the evidence and analysis in the Country Program Evaluation: (i) Prioritizing Bank Group support around the move towards deeper regional integration was an effective anchor for key economic reforms for economic convergence. (ii) Pursuing a selective and adaptive approach in a country with high implementation capacity and institutions, strong coordination among development partners, and access to a wide range of external resources can allow the Bank Group to exercise significant influence in areas of comparative advantage and global expertise. (iii) A stronger focus on outcome-based programmatic approaches helped to build local capacity and crowd-in partner financing.