Question

1) Discuss the company's top risks? 2) Discuss whether the company treats risk reactively or proactively? 3) Do you observe a lack of understanding of potential exposures? 4) Does the company focus on internal risks or external risks? 5) Do you think the company is well prepared to respond to potential risks?

Answer 1

1. The company’s top risks are as follows:

a. Strategy Risk- The strategy risk arises when the strategy applied to the scenario is failed. Although the Robert Citron was very good treasurer but his strategies fails.

b. Market Risk- The risk arises in the market due averse business working policies applied by the government such as increase in taxes, tariffs etc. Hence, as eth market condition was not sound during the period so the system of business fails.

c. Operation Risk- The operational risk is related to the failure of operations of business. As the Documentation work, investment policies, risk control measures etc. was not properly done by the company, hence it fails.

2. The company treats risk activity because they do not take the risk averse in advance. They do not plan for the risk which may occur in future.

3. Yes, I do observe a lack of understanding a potential exposure because the company invests in the market pool without knowing the risks associated in the market. It is like a trend others follows, the company too followed. They played in the market with the large pool of money with high risk associated without proper strategy making policies as well as risk management plans.

4. The company focus on internal risk because they made the rules and policies stringent. They do the internal changes like agreements or policy making with more stringent way. The external risks such as market as well as Legal risks was not taken into consideration.