Risk Management is a system developed to allow companies determine, analyse, evaluate risks they are exposed during operations and because of the influencing factors in their environment and to take actions against such risks as and when required. Ultimate purpose of risk management is to provide support to decision-makers within the company about managing risks.

The following are some of the risks companies are exposed to:

• Liquidity Risk
• Credit (Default) Risk
• Interest rate risk
• Exchange Rate Risk
• Health, Safety , Environment and Security Risks
• Compliance/Regulation Risks
• Project Risks
• Business Risks
• Contract Risks
• IT/Technology Risks
• Strategic Risks

Potential impacts of these risks on company’s operational outcomes are determined and reported through Risk Management. Risk evaluation results obtained with a prospective approach are integrated into decision-making processes.

Risk Management concept dating back to 1960s in the world gained importance in our country upon emergence of economic crises. Recently, Banking Regulatory and Supervisory Agency (BRSA) made it compulsory to carry out risk management processes; thus, Banks and other Financial Institutions became pioneer in implementation of this system. At present, risk management (also known as corporate risk management) is implemented effectively by many corporate companies.

Companies use risk analysis results effectively particularly in the following processes:

• Corporate Strategy
• Project/Investment Decisions
• Pricing
• Performance Assessment

Proper and effective risk management provided companies with the opportunity to minimize unexpected risks and take continuous and firm steps towards their business targets. As RoyalCert, we establish risk management systems consistent with our client’s business structure and we monitor system efficiency periodically.