BU7009 Financial Risk Management Assessment Brief 2024/25

Assessment Task

The relevance of risk management frameworks for organisations in the current business environment cannot be underestimated. Organisations constantly face new dimensions of risk, requiring assessment to understand if the risk management framework and processes are robust for the direction of the company.

For the FTSE 100 company allocated to you in the appendix below, answer the following questions from the stance of a potential investor in the company, using theories and concepts discussed in the module, and those from your
wider research. 

Required:

1. Strategic planning and stakeholders

- Critically analyse your company’s approaches to strategic planning, focusing on Porter’s generic strategies and Ansoff’s product/market matrix.
- Identify and map the stakeholders of your company, using stakeholder power/interest grid and discussing the company’s approaches to manging various categories of stakeholders.

2. Financial risk and CAPM

- Identify and prioritize the main sources of financial risks that your company is facing (using the Risk Assessment Survey and Risk Mapping Tool) and critically evaluate how this company is mitigating such risks (concerning COSO’s Enterprise Risk Management, IRM's risk management standard and ISO 31000 Risk management).
- Use the capital asset pricing model to estimate the cost of equity of your company, explaining the impact
of various risks on its cost of equity. Critically discuss the limitations of the capital asset pricing model.

3. Reputational risk and cyber-security threats

- Identify your company’s sources of reputational risks and critically analyse its approaches to managing these risks.
- Analyse the cyber-security threats to your company and evaluate the measures that it is putting in place to guard against such threats.

Learning Outcomes

1. Assess and evaluate the theoretical basis of financial risk.

2. Critically evaluate management tools available to deal with different types of risk facing an organisation.

3. Deploy appropriate Risk management theory and techniques to the evaluation and analysis of performance measurement.

4. Critically evaluate the strategic and stakeholder analysis using appropriate Risk management theory and
tools.