PowerPoint Presentation

[Audio] We are excited to present this course on Risk Management in Higher Education. This course will provide you with a comprehensive understanding of the global risk environment sector regulators and regulatory frameworks that affect your organization. You will gain knowledge and skills in risk management processes frameworks standards and risk management frameworks as a foundation of organizational success. Additionally you will learn about commercial policy risk management frameworks and how to manage risks to contribute to the success of your organization. You will also learn about the latest trends and future developments in risk management. By the end of this course you will be equipped with the skills and knowledge to manage risks effectively and contribute to the success of your organization..

[Audio] Risk and opportunity are often blurred together. It is essential to distinguish between them to effectively manage risks..

[Audio] Discuss the fundamental concept of risk-return tradeoff in investment. The principle states that potential return rises with an increase in risk. This helps investors balance desired returns with acceptable risks. It's crucial to consider many factors including overall risk tolerance potential to replace lost funds and more. By understanding the risk-return tradeoff investors can make informed decisions and achieve their investment goals..

[Audio] Risk exposure refers to the potential loss that an investor employer or business may face by engaging in a particular activity or investment. This potential loss can be calculated by multiplying the probability of a risk event occurring by the amount or impact of its potential losses. There are different types of risk exposures including transaction exposure operating exposure and translation exposure. Understanding risk exposure is crucial for making informed decisions about investments operations and overall risk management strategies..

[Audio] Risk tolerance is the degree of risk that an individual is willing to endure given the volatility in the value of an investment. It is an important factor in determining the type and amount of investments that an individual chooses. Risk tolerance is influenced by several factors such as age income goals and time horizon. Financial planners often categorize risk profiles as conservative moderate or aggressive. A conservative risk profile means that the investor is risk averse and prefers to avoid taking on too much risk. A moderate risk profile means that the investor is risk neutral and is comfortable with taking on a moderate amount of risk. An aggressive risk profile means that the investor is risk seeking and is comfortable with taking on a significant amount of risk to achieve higher returns. Understanding your risk tolerance is crucial in making informed investment decisions and achieving your financial goals. It is important to regularly assess your risk tolerance and adjust your investment strategy accordingly..

[Audio] The concept of risk threshold will be discussed. Risk threshold refers to the level of risk that an organization individual or stakeholder is willing to accept. It is the level of exposure or uncertainty that triggers action or avoidance. The risk threshold depends on various factors such as income liabilities objectives and risk appetite. Understanding your risk threshold is crucial in determining the level of risk you are comfortable taking on. For example if an organization's risk threshold is high they may be willing to take on more risks in pursuit of higher returns. On the other hand if an individual's risk threshold is low they may prefer to take on less risk to avoid potential losses. It is important to regularly evaluate and adjust your risk threshold based on changes in your circumstances and the global risk environment. This will help you make informed decisions and minimize potential losses..

[Audio] We will discuss Acceptable Risk.. CGQP (ICSA) Risk Management.

[Audio] In higher education the process of selecting and implementing strategies to address specific risks is crucial for effective risk management. Risk treatment options such as internal and financial options are available to reduce remove avoid transfer or alter the risk. The choice of risk treatment option depends on various factors and is an iterative process following a risk analysis and aiming to achieve the desired outcome. Risk treatment is crucial in ensuring the safety and well-being of students faculty and staff. A comprehensive risk management framework that includes risk treatment options is necessary to effectively mitigate and manage risks in higher education..

[Audio] This slide now focuses on Risk Appetite. Risk appetite refers to the level or amount of risk that an individual or organization is willing to take in order to achieve its objectives. This reflects the trade-off between the potential benefits of innovation and the threats of change. Risk appetite is determined by the individual or organization’s board of directors or management and can vary depending on the context and value of the objectives. It is measured by the residual risk that remains after controls and other measures have been applied..

[Audio] We will discuss the concept of risk capacity. Risk capacity refers to the level of risk that an individual or an organization can or needs to take with their assets or business functions. It depends on various factors such as current and future cash flows strategy and objectives risk capital and obligations to stakeholders. Understanding your risk capacity is essential for effective risk management..

[Audio] Risk is an inherent part of any investment decision and it is important for investors to understand their attitude towards risk in order to make informed decisions..

[Audio] Organizations must understand the different types of risk-seeking and risk-averse attitudes to make informed decisions and manage risks effectively. This concept is illustrated in the graph on this slide where the behavior of a risk-averse individual is depicted as a concave outline while the behavior of a risk-taker is depicted as a convex outline. This graph is intersected by a straight-line utility function which represents risk-neutral behavior. Next we will discuss the regulatory frameworks and sector regulators that govern the risk environment..

[Audio] We'll discuss the three main reasons why shareholders take risks in their investment decisions..

[Audio] Global Risk Environment Investors seek gains and are willing to take on more risk to do so. There is a direct correlation between risk and return. The more risk an organization takes on the more potential gains they can generate. However it's important to be aware that an increase in risk also comes with a higher chance of bankruptcy. Therefore it's important for organizations to carefully manage their risk and balance it with their return potential..

[Audio] We will discuss the concept of limited liability in business organizations in Malaysia. In Malaysia businesses are often organized as private or public limited companies or stocklisted companies. Unlike a sole proprietorship where the owner has unlimited liability limited liability is a characteristic of these companies. This means that shareholders are prepared to take higher risks as they only lose their initial investment in the worst case. According to Company Law and the Constitution of the Company (Memorandum and Article of Association) shareholders are not obligated to provide additional funds in case of bankruptcy. This allows for the creation of new ventures and the taking of calculated risks. However businesses need to understand the responsibilities and obligations that come with limited liability including the need for effective risk management and compliance strategies..

[Audio] High-risk-taking can increase the likelihood of financial ruin for even profitable enterprises. While positive cash flow is significant it is not the only factor to consider. Indeed a project business company may seem profitable based on its income statement but if the customer fails to settle the invoice after issuance the company may become insolvent and declare bankruptcy. These extra costs can have a considerable impact on the organization and its stakeholders..

[Audio] We must take a proactive approach to risk management to successfully navigate liquidation or going concern..

[Audio] It is crucial to have a balanced cash flow consisting of operational cash investment cash flow and financing cash flow. If the cash flow is too volatile it can limit the ability to access external sources of finance and increase the risk premium for shareholders and financial institutions. The risk premium is determined by various factors including the company's financial stability creditworthiness and the level of risk associated with the investment. Therefore it is important for businesses to carefully manage their cash flow and ensure that it is balanced and predictable. This can help mitigate risk and improve overall financial performance..

[Audio] We are excited to present this slide deck to you. It contains important information and insights that we hope will be helpful. Please let us know if you have any questions or if there is anything we can do to help. We appreciate your interest in this topic and look forward to hearing your feedback..

[Audio] Discuss the concept of risk diversification in financial investments. Risk diversification involves spreading investments across various financial instruments to reduce overall risk of the portfolio. Diversify the portfolio to reduce exposure to any single risk and increase chances of achieving business strategy. Risk diversification is important for risk management in finance and recommended by financial experts as a way to minimize market fluctuations and uncertainties on investment returns..

[Audio] We hope the information shared proves valuable in your risk management practices..