Corporate philanthropy, reputation risk management and shareholder value: A study of Australian corporate giving

This study examines the role of corporate philanthropy in the management of reputation risk and shareholder value of the top 100 ASX listed Australian firms for the three years 2011-2013. The results of this study demonstrate the business case for corporate philanthropy and hence encourage corporate philanthropy by showing increasing firms’ investment in corporate giving as a percentage of profit before tax, increases the likelihood of an increase in shareholder value. However, the proviso is that firms must also manage their reputation risk at the same time. There is a negative association between corporate giving and shareholder value (Tobin’s Q) which is mitigated by firms’ management of reputation. The economic significance of this result is that for every cent in the dollar the firm spends on corporate giving, Tobin’s Q will decrease by 0.413%. In contrast, if the firm increase their reputation by 1 point then Tobin’s Q will increase by 0.267%. Consequently, the interaction of corporate giving and reputation risk management is positively associated with shareholder value. These results are robust while controlling for potential endogeneity and reverse causality. This paper assists both academics and practitioners by demonstrating that the benefits of corporate philanthropy extend beyond a gesture to improve reputation or an attempt to increase financial performance, to a direct collaboration between all the factors where the benefits far outweigh the costs.

Modular risk modeling and management of water infrastructure disaster incidents

Water supply and wastewater control are critical elements of society's infrastructure. The objective of this study will be to provide a generic risk assessment tool to provide municipalities and the nation as a whole with a quantifiable assessment of their vulnerability to water infrastructure threats. The approach will prioritize countermeasures and identify where research and development is required to further minimize risk. This paper outlines the current context, primary concerns and state-of-the art in critical infrastructure risk management for the water sector and proposes a novel approach to resolve existing questions in the field. The proposed approach is based on a modular framework that derives a quantitative risk index for varied domains of interest. The approach methodology is scaleable and based on formal definitions of event probability and severity. The framework is equally applicable to natural and human-induced hazard types and can be used for analysis of compound risk events.

Status of hilsa (Tenualosa ilisha) management in the Bay of Bengal: an assessment of population risk and data gaps for more effective regional management

Assessment of country status papers on hilsa fisheries presented at the BOBP – IGO Chittagong, Bangladesh 2010. Assessment of status hilsa management in Bangladesh, India and Myanmar. Brief recommendations of potential follow-up activities that could enhance management. Risk assessment of hilsa in each country with Productivity Susceptibility Analysis (PSA). Summary of new approach to assess ecological risk.

Regulation: A Burden in Biopharmaceutical Industry? The Case of EU-Risk Management Plans

The generation of new medicinal products is both a contributor to global economic growth and a source of valuable benefits to human health. Given their direct responsibility for public health, regulatory authorities monitor closely both the development and exploitation of the underlying technologies and the products derived from them. The manner in which such regulation is implemented can result in regulators constraining or facilitating the generation of new products. This paper will study as an example the impact of EU Risk Management Plans (EU-RMPs), which have been mandatory for the approval of new medicines since 2005, on both the industry and regulatory authorities. In interviews, the responses of those who had experience of the implementation of EU-RMPs were mixed. Although the benefits of a more structured and predictable approach to the evaluation of risk were appreciated, some respondents perceived the regulation as an excessive burden on their organisations. The exploration of factors that influence how EU-RMP regulation affects individual firms provides new insights for both regulators and managers, and demonstrates one aspect of the complexity of the process by which new medicinal products are brought to market.

Regulation: A burden in biopharmaceutical industry? The case of EU-risk management plans

The generation of new medicinal products is both a contributor to global economic growth and a source of valuable benefits to human health. Given their direct responsibility for public health, regulatory authorities monitor closely both the development and exploitation of the underlying technologies and the products derived from them. The manner in which such regulation is implemented can result in regulators constraining or facilitating the generation of new products. This paper will study as an example the impact of EU Risk Management Plans (EU-RMPs), which have been mandatory for the approval of new medicines since 2005, on both the industry and regulatory authorities. In interviews, the responses of those who had experience of the implementation of EU-RMPs were mixed. Although the benefits of a more structured and predictable approach to the evaluation of risk were appreciated, some respondents perceived the regulation as an excessive burden on their organisations. The exploration of factors that influence how EU-RMP regulation affects individual firms provides new insights for both regulators and managers, and demonstrates one aspect of the complexity of the process by which new medicinal products are brought to market. © 2010 IEEE.

Comparative analysis of corporate risk management practices in Croatian and Slovenian companies

The paper explores differences as well as commonalities in corporate risk management practices and risk exposures in the large non-financial Slovenian and Croatian companies. Comparative analysis of survey results have revealed that the majority of analysed companies in both Croatia and Slovenia are using some form of risk management to manage interest-rate, foreign exchange, or commodity price risk. Regarding the intensity of influence of financial risks on the performance of the analysed companies, the results have shown that the price risk has the highest influence among the Slovenian as well as the Croatian companies. Croatian companies are more affected by currency risk than the Slovenian companies, while the interest-rate risk has been ranged as less important in comparison with commodity price and currency risks. The survey’s results have clearly indicated that Croatian and Slovenian non-financial companies manage financial risks primarily with simple risk management instruments such as natural hedging. In the case of derivatives use, forwards and swaps are by far the most important instruments in both countries, but futures as representatives of standardised derivatives and structured derivatives are more important in the Slovenian than in the Croatian companies.

Emergency Management in Developed Countries: An Investigation of Hazard Risk, Vulnerability and Government Response in the UK and USA

During the summer of 2007 the United Kingdom experienced some of the worst flooding in its history, with the city of Hull amongst the worst affected. Meanwhile, the city of New Orleans, USA was subject to severe flooding in August 2005 as a result of Hurricane Katrina. The study has found that both the UK and US government disaster management programmes were ill prepared for these flood events. Many parallel issues have been discovered and discussed. The conditions of vulnerability that are evident in developing countries are not widely present in the UK or US but this must not be allowed to lead to complacency and lack of preparation and awareness. The cost in terms of mortality is relatively low compared to similar events in developing countries; however, the economic implications are considerable and must be addressed.

Vulnerability and robustness of SME supply chains: An empirical study of risk and disturbance management of fresh food processors in a developing market

The aim of this paper is to analyse vulnerability and robustness of small and medium size enterprises (SMEs) supply chains and to consider contextual factors that might influence the success of their disturbance management: Risky product and business environment. By using an exploratory case study it is shown how these contextual factors attribute vulnerability sources, contribute to the robustness of a company’s performance and supply chain vulnerability, as well as how a company seeks to manage internal and external vulnerability sources. The exploratory case is based on a fresh food supply chain of a manufacturing SME operating in a developing market.
Case findings suggest that fresh food supply chains of a manufacturing SME in developing markets are prone to disruptions of their logistics and production processes due to ‘riskiness’ of fresh food products, the ‘riskiness’ of developing markets, as well as ‘riskiness’ of SMEs themselves. However, this does not necessarily indicate the vulnerability of an SME and its entire supply chain. Findings indicate that SMEs can be very successful in disturbance management by selective use of redesign strategies that aim to prevent or reduce the impact of disturbances. More precise, it is likely that an SME can achieve robust performance by employing preventive redesign strategies in managing disturbances that result from internal, company related vulnerability sources, while impact reduction strategies are likely to contribute to robust performance of an SME if used to manage disturbances that result from internal, supply chain related vulnerability sources, as well as external vulnerability sources.

The Valuation Implications of Enterprise Risk Management Maturity

Enterprise Risk Management (ERM) is the discipline by which enterprises monitor, analyze, and control risks from across the enterprise, with the goal of identifying underlying correlations and thus optimizing the risk-taking behavior in a portfolio context. This study analyzes the valuation implications of ERM Maturity. We use data from the industry leading Risk and Insurance Management Society Risk Maturity Model over the period from 2006 to 2011, which scores firms on a five-point maturity scale. Our results suggest that firms that have reached mature levels of ERM are exhibiting a higher firm value, as measured by Tobin's Q. We find a statistically significant positive relation to the magnitude of 25 percent. Upon decomposition of the maturity score, we find that the most important aspects of ERM from a valuation perspective relate to the level of top–down executive engagement and the resultant cascade of ERM culture throughout the firm. Firms that have successfully integrated the ERM process into both their strategic activities and everyday practices display superior ability in uncovering risk dependencies and correlations across the entire enterprise and as a consequence enhanced value when undertaking the ERM maturity journey ceteris paribus.