Business Risk Assessment: What You Need to Know
The unprecedented polar vortex volatility has raised a new level of awareness around the importance of business risk assessment. An energy business seeking assistance with their risk management challenges will require a team of experienced risk management consultants with deep knowledge of the industry. Energy veterans have an upper hand when approaching your enterprise risk needs because they understand your business.
Below are different ways risk management consultants are able to assist with your everyday energy risk management challenges.
Enterprise Risk Assessment Energy Risk Management experts can help define your enterprise risk management framework organized around the strategic objectives, risks, controls, and alignment. These principles provide a holistic view of risk and form a base conceptual framework for identifying, understanding, and defining risks to set appropriate risk tolerances.
Governance and Controls Once an Enterprise Risk Framework is established the role of the risk management consultant is to establish core governance and controls enablers such as commodity risk management policy, risk limits, trading and asset based hedging programs, internal controls and segregation of duties.
Risk Measurement and Monitoring Risk management consultants can assist in the design, development and implementation of risk measurement metrics and reporting. Accurate measurement and effective monitoring of positions, P&L and limits enable commercial strategy and revenue generation. Deal modeling and forward curve analysis is the key to this aspect of risk management.
Risk Systems and Process Energy Trading and Risk Management Systems (ETRM) and process that support a company's trading or hedging activity is another area where risk management consultants can bring value to your business risk assessment. This is critical for clients who desire a front to back approach to risk.