by Lex Kriel, Associate Director, Monique de Waal, Senior Manager and Gerber Schnetler, Manager, Deloitte
Brexit. A looming sovereign credit downgrade. Nene-gate. Weak commodity prices. These are only a few examples of recent events that have rocked the local market to such an extent that risk management has to be a key priority for corporates. With continued uncertainty in key markets such as the USA, EU and China showing no signs of abating, the days of dressing up sporadic hedges as a risk management approach are over. Volatility is here to stay.
Are risk appetite frameworks really relevant to corporates?
In this environment, as in any other, the board and senior management are expected to manage their companies in the best interest of all stakeholders by maximising shareholder value and honouring commitments. This is a tough assignment at the best of times but even more demanding during the volatile environment of today. A strong risk framework will assist the board and management to weather the storms that could otherwise sink the company.