RISK MANAGEMENT SOLUTIONS
Our approach to Risk goes further, there is clear evidence in Nigeria that very high level of volatilities in the business environment increases uncertainty and the resulting risks for businesses. This demands a strategic‐level attention to risk management. This strategic‐level attention is warranted by the fact that proper risk management capabilities can lead to competitive advantage and that is our objective.
Synterra provide market intelligence and business risk management solutions for investors wishing to participate in the natural resource sectors of the Nigerian economy. We have developed precise and sophisticated models which enable investors to accurately construct financial models and effectively de-risk investments. Our models incorporate sociopolitical metrics in addition to macroeconomic, industry and counterparty assessments.
Nigeria can present numerous risks, financial, exchange rate, political for rxample, often on a daily basis. Synterra will help you to meet these challenges, because our experts work together with you to understand risk from your perspective. This approach enables us to provide you with bespoke strategic advice and innovative solutions across a wide range of insurable and non-insurable risks. Unlike management consulting firms with risk divisions, Nigeria risk is our sole focus – which is why you can consistently call upon us to handle your most challenging business issues.
We help you to manage your organisation’s risk strategically, with bespoke solutions designed to meet not only your risk management objectives, but also your overall business goals. Using industry-leading data and analytics, we evaluate your exposures and risk management programme gaps, helping you to determine the return on your investment and make informed decisions about programme adjustments and direction.
Strategic Risk Management
Successful businesses have many things in common, today we’ll look at the big ‘R’of recognitional advertising network may help.
Recognition can be illustrated by two individuals entering a crowded room at a party.
Financial Risk Management
Our solutions incorporate fx, interest rate and interest rate
preserving the true value of the investors yield
Operational Risk Management
requires an indepth appreciate of in- country risks
which range from insecurity to logistics and infrastructure.
Nigeria has competing Regulators that create systemic ambiguities
charting Compliance is vital as it has the potential to put you out of business.
NIGERIA IN COUNTRY RISK
- Evaluating Risk
- STRATEGIC RISK
- COMPLIANCE RISK
- FINANCIAL RISK
- OPERATIONAL RISK
- REPUTATION BRAND VALUE RISK
Our risk models employ a variety of tools that help in evaluating risks. Our proactive risk assessment methodology allows us to perform prompt Risk evaluation in determining the significance of risks to the business and decide to accept the specific risk or take action to prevent or minimise it.
To evaluate risks, it is worthwhile ranking these risks once you have identified them. We do this by considering the consequence and probability of each risk. Many businesses find that assessing consequence and probability as high, medium or low is adequate for their needs. These are then compared to your business plan - to determine which risks will affect your objectives - and evaluated in the light of legal requirements, costs and investor concerns. In some cases, we have found the cost of directly mitigating a potential risk may be so high that doing nothing makes more business sense.
STRATEGIC RISK SOLUTIONS.A possible source of loss that might arise from the pursuit of an unsuccessful business plan. For example, strategic risk might arise from making poor business decisions, from the substandard execution of decisions, from inadequate resource allocation, or from a failure to respond well to changes in the business environment. Strategic risks are those that threaten to disrupt the assumptions at the core of an organization’s strategy. They’re often hard to spot and hard to manage. What makes them especially difficult for executive teams is that traditional approaches view risk as mainly negative—things to hedge or mitigate. Because strategic risks can threaten the logic of management’s strategic choices, they’re owned by the leaders of the organization responsible for those choices and the future of the organization.
Synterra view strategic risk as the next frontier of risk management. One of the distinctive elements of strategic risk is the way it can point to the next horizon, the next opportunity, the next market. A paradigm shift that will allow participants to see the relationship between the risks that are sometimes imposed on them and the opportunities for new businesses or services. Organizations and their leaders can accelerate how quickly they discover new strategic risks in a way that compels action and fits these risks into an ongoing process that’s connected to other functions, such as corporate strategy and finance.
Compliance risk is exposure to legal penalties, financial forfeiture and material loss an organization faces when it fails to act in accordance with a country's laws, industry regulations, internal policies or prescribed best practices. ompliance risk is also sometimes known as integrity risk. Many compliance regulations are enacted to ensure that organizations operate fairly and ethically. For that reason, compliance risk is also known as integrity risk. Compliance risk management is part of the collective governance, risk management and compliance (GRC) discipline. The three fields frequently overlap in the areas of incident management, internal auditing, operational risk assessment, and compliance with regulations such as the Sarbanes-Oxley Act. Penalties for compliance violations include payments for damages, fines and voided contracts, which can lead to the organization's loss of reputation and business opportunities, as well as the devaluation of its franchises. Companies continue to have significant anxieties over how regulatory challenges can affect their strategic directions, their operations and their ability to compete on a level playing field. A recent wave of landmark fines issued against major commercial players, signal significant drive towards the implementation of stricter regulatory compliance, following years of relatively lax enforcement. Over the last two years, more than 10 companies across various industries have been hit with fines ranging from N1 billion to N1trillion. Several organisations are periodically sanctioned by their industry regulator and a number of listed entities are being examined, suspended, or fined for flouting one post listing requirement or the other. The regulatory environment in Nigeria is complex and creates challenges even for companies that strive hard tobe compliant. The country has an array of legislations andby-laws to regulate almost every area of economic activity.The abundance of laws also means that there are frequently overlaps, creating room for arbitrary interpretation or ambiguity. For instance, operators have to deal with two orthree regulatory bodies, functioning independently of, andsometimes in competition with, each other. While this may have provided a lacuna for some companies, it also means that companies are sometimes unaware of legislation that applies (or does not apply) to them, thereby increasing the riskof regulatory breach. Within this challenging state of regulatory uncertainty, we also see an opportunity for companies to improve their local positioning and risk management approaches. Synterra assist organisations by developing and maintaining an up-to-date regulatory templates as a comprehensive repository of all regulations impacting it. We further enhanced this template by automating theprocess for notifying responsible officers of their complianceobligations andescalating noncompliance through the risk management structure. It should also set up relevant oversight structures at the board and management level for periodicallymonitoring and receive assurance on regulatory compliance. Subsequently, organisations are encouraged to conduct periodic compliance audits and invest in internal capacity building around compliance issues In the longer term, companies should develop a framework for engaging and managing their regulatory stakeholders. This includes identifying the regulators, prioritizing them based on defined criterion and developing new strategies for managing them with a view to building sustainable relationships not just with regulators but across a broader base of key public sector stakeholders. This will help to ensure a structured and consistent approach to managing regulators while streamlining the company’s time and efforts. It will deepen the understanding of regulators’ priorities, improve trust, facilitate dialogue that will improve policy formulation, and consequently help companies to shape the business environment around their operations.
FINANCIAL RISK OVERVIEW
Uncertainty in Fiscal and Monetary Policy” represents a significant risk of doing business in Nigeria. Directly or indirectly, corporates face risks emanating from uncertainty about the direction of fiscal or monetary policy. Uncertainty is often heightened during adverse economic circumstances, which may compel policy reactions that distort the decision-making function of corporates.
While foreign exchange rates have been relatively accessible since the devaluation of the naira, a number of organisations have continued to reel from the effect of the devaluation. Currently, corporates require foreign exchange to meet foreign currency-denominated input costs, service foreign currency credit liabilities, and repatriate profits (in the case of multinational corporations). On the flipside, indigenous corporates with substantial international footprint might earn foreign exchange from their export proceeds.
Our financial risk managers have immense experience in creating hedging strategies structured to provide protection for investors and market entrants. The active management of FX risk has become imperative, due to the CBN’s flexible FX rate policy which seeks to improve the dynamics of the Nigerian FX market. In addition, Nigeria is still behind the levels of foreign exchange liquidity generated from export proceeds and capital inflows in 2013.
This is despite improved terms of trade and significantly higher capital inflows (in part due to the introduction of the I&E FX window) which helped ease concerns about FX availability and rate stability in 2017.
‘Business operational risk relates to activities carried out within an entity, arising from structure, systems, people, products or processes.’ Operational risk has also been defined as ‘The risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.’ There is a huge variety of specific operational risks. By their nature, they are often less visible than other risks and are often difficult to pin down precisely. Operational risks range from the very small, for example, the risk of loss due to minor human mistakes, to the very large, such as the risk of bankruptcy due to serious fraud. Operational risk can occur at every level in an organisation. Operational risks are generally within the control of the organisation through risk assessment and risk management practices, including internal control and insurance.The type of risks associated with business and operation risk relate to: • business interruption • errors or omissions by employees • product failure • health and safety and insecurity • failure of IT systems • fraud • loss of key people • litigation • loss of suppliers.