The Energy & Resources Industry is asset-intensive. Companies that manage these assets are often confronted by compliance issues with regulatory requirements, safety and environment threats and equipment that is old maintenance issues, as well as budget restrictions. These factors could be a major influence on an organization’s internal successful external, strategic and internal success.

A comprehensive approach to risk management is crucial to safeguard against these risks and to ensure that a company can keep up with the needs of customers. This article provides the major areas of asset and risk management:

Counterparty risk management focuses on ensuring that key relationships (such as prime brokers and derivative counterparties, as well as clearing banks and custodians) are creditworthy and that includes implementing safe procedures to safeguard against reputational or financial damage from the failure of those partners. This is done by vetting vendors, and ensuring that the approval process does not only apply to the vendor, but also the services they provide.

Market risk is a potential decline in portfolio value. Asset managers as well as risk management are concerned about it, however from different perspectives. Portfolio managers focus on managing their market exposures to minimize unintended market and factor bets, while risk managers try to manage crowded leverage and trades, and to examine liquidity, expected volatility and cash flow.

A robust 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 https://expertalmanagement.de/2021/09/01/top-horrible-features-to-avoid-when-buying-a-laptop-for-play-or-work/ an effective tool for identifying and minimizing the risks that could impact an organization’s performance.