BFF5902 Introduction to Risk Management

Simon Education – BFF 5902 by Maria

BFF5902 Introduction to Risk Management

Semester 1, 2021

Individual Assignment

 

 

Due: Week 10, 11.00 am Wednesday May 12, 2021.

Submission: Submit electronically via Moodle

Weight Assigned: 20 %

 

 

1. Instructions

  1. This is an individual assignment.

 

  1. This assessment is designed to test your achievement of Objectives 1 to 5 as detailed in the Unit Outline.

 

  1. The maximum word limit for this assignment is 2,500 words with a 10% allowance (2,750 words). The word count includes: the Title Page, Executive Summary, body of the report and all Appendices. The Bibliography, Table of Contents, figures and tables are excluded from

the word count limit. 字数要求最多2500词+10% -并不是没有最低下限,最佳字数在

2400+~2500+超过2750会被扣分。字数不到会被酌情扣分(如果文采出众观点新颖论据充分也许不扣分)

 

注意:目录、数据表格参考文献不算在字数里。但是:标题页、摘要、正文和附录算作字数

 

  1. The assignment will be marked out of a total of 100 marks, and will count toward 20% of the total marks for this Unit.

 

  1. Work submitted for assessment must be accompanied by a completed and signed assignment coversheet (link available on Moodle).

 

  1. The assignment must be submitted via Moodle by the due date and time. Please note penalties will apply to late submissions. A penalty of 5% of the total mark allocated to this assessment task will be deducted for each day, or part thereof, if it is late. Multiple submissions are permitted up to the due date and time.

2. Researching your topic

For the purpose of this assignment, you must research and write a comparative report about two companies in the same industry. You must select TWO companies from the same industry, as shown in Section 4. 规定的两家公司!!!只能写指定的!!!

 

Unless with prior agreement with the Unit coordinator, you must only use the companies listed in this assignment. Failure to comply may result in a zero grade. Should you have any queries regarding your selection of the two companies, contact the Unit Coordinator using only your Monash student email address and include “BFF5902 Assignment” in the subject line in the email. Be sure to include your name, student number and a valid telephone contact number in any email sent. The Unit Coordinator can be contacted by email at:

iain.maclachlan@monash.edu

 

For this engagement you will have to research and analyse relevant information from internet sources and databases (e.g. Company Annual reports, 10-K forms, and other

governance/sustainability reports and investor information) sourced from company websites, Reuters, Bloomberg, NASDAQ and Yahoo Finance internet sites). Relevant electronic databases are also available from the Monash Library such as MarketLine IBIS

World,Hoover’s, FACTIVA databases. 能用的database(仅限外国文献)中国知网自己翻译不作数!!

 

To use and analyse data from the EDGAR web site run by the Securities & Exchange Commission (SEC) go to: https://www.sec.gov/edgar/searchedgar/companysearch.html. 上市公司搜这里找数据

 

Think creatively in performing your analysis and make justifiable assumptions where necessary to overcome the hurdles you may confront such as any deficiencies in data availability about the company, its industry, and its competitors. When using other sources remember to cite them correctly.

 

You will find most of what you need from careful reading of the annual report and the company’s website including statements of the firm’s objectives. Note that the firm’s descriptions of risks will be set out in the 10-K form under section Item 1A or otherwise in an equivalent section of the annual report headed “Risk Factors” or “Top and Emerging Risks”. Corporate backgrounds, trends in financial performance, and profit/revenue segment information that illustrates the firm’s context is also available in the annual reports. 关于风险的文献在10-K的1A section或者是年报中写有Risk Facors一类的文字

 

3. Style of your report (必须含有以下部分)

Your written report must include the following components (reports not in this format will be penalised):

 

  • A Title Page for the report; 标题页!(单独的一页写有论文标题)
  • An Executive Summary which highlights the scope of the report, and its most significant findings and recommendations (typically 1/2 page at most);摘要部分,单独一页写明你的结构并且列出你觉得最有价值的观点&建议 (一般200-

250词为佳,不要超过A4纸半页。也是单独的一页)计入字数

  • A Table of Contents;

目录(每个部分要写主标题副标题并且要注意标明页数,不要过分繁杂,主要分析

的部分3个副标题左右为佳,注意论文结构和表述不要观点过分散乱)

  • An appropriate very brief introduction that discusses the purpose of the report, the report structure (which should reflect the scope of work performed) and any limitations;

注意和 Executive summary是有区别的,类似说明一下你的论文思路从A怎么讨论到B再到C得出结论,同时需要指明报告中的局限性(例如信息来源不够完整,无法获取公司内部信息,自己能力有限无法给出进一步的分析等等,又或者说是在运用模型上因为不了解公司实际情况可能有不适用的条件等)

  • The body of the report should include the outcomes of the research and analysis; 正文
  • A conclusion that summarises the analysis and findings

结论:主要总结一下你的分析和发现(就是写在executive summary的那个要展开说说)

  • Appendices should be used for detailed and/or large tables and figures; and附录(放大型表格和数据-别直接放在正文里)
  • A bibliography of references used should be included. 参考文献(15个+的来源为佳)

 

As this is a professional standard report it is important to use general principles of good business report writing to communicate succinctly. Use of tables, figures, and summarised lists is encouraged. When using tables and figures remember to label them and reference and discuss their content in the text. Detailed analysis can be contained in tables and appendices in preference to the main text. Each section of the report should flow logically to the next and be consistent in argument. Remember diagrams are not included in your word count and may convey information more succinctly. An important tip – to avoid words being counted in your total, you can copy and paste tables and figures as embedded pictures. 所有的数据和图片要标明来源并且给标题。如果有涉及到详细的数据分析等需要写在附录里。

(字数超了的话可以把表格数据保存为图片就不会计入字数了)

 

Work submitted for assessment must be consistent with the guidelines set down in the Q Manual, which is the faculty’s student guide for producing quality work on time. Copies of this manual can be purchased at the bookshop or accessed online at:

http://www.buseco.monash.edu.au/qmanual/qmanual.pdf

写作途中有什么关于国外写作的问题或者结构区别不清楚可以查这个链接——属于Monash的论文标准

 

Marks may be deducted where in-text citations and/or the reference list is not consistent with the American Psychological Association (APA) style, which is illustrated in the Q Manual.

所有在文后参考文献里的资料用到的语句在文内都需要标注引用,比如XXX说过(书名,年份)具体参考APA指南。

 

 

 

 

 

 

4. Tasks to be completed

You must select one pair of exchange-listed companies from three alternative pairs shown in the table below. The companies you choose should be on the same row.

 

Unlike prior semester assignments the company’s shown are not limited to being US exchange-listed. You will now have the opportunity to compare global companies under different risk reporting guidelines. If the company is not US exchange-listed, then there is no 10-K and you should refer directly to the published annual report where indicated. To make it easier, in the table below you are shown where to locate the key risks as reported in their 2020 annual reports.

 

Base your analysis on the most current information and most recent annual reports. Important: make sure you use the tickers provided in parentheses to find the correct companies when you are searching for information.

 

Table 1. Companies available for selection

Sector Company 1 Company 2  
Banking HSBC Holding Plc (HSBC) Standard Chartered Plc (STAN.L)
  Key Source: Annual Report 2020,Top and Emerging

risks, starting at page 110.

Key Source: Annual Report

2020, Principal and

Emerging risks, starting at page 254.

 
Airlines United Airlines Holdings Inc (UAL) Deutsche Lufthansa AG (DLAKY)
  Key Source: Form 10-K, Item 1A. Key Source: Annual Report 2020, Opportunities and risk report, starting at page 71.  
Footwear & Accessories Nike Inc (NKE) Adidas AG (ADDYY)
  Key Source: Form 10-K, Item 1A. Key Source: Annual Report 2020, Risk and Opportunity, starting at page 172.  

 

Once you have selected the two companies you must perform the following tasks and prepare your report.

 

以上三组选一组,只能从里面选!!每组是两家公司!!!不是六选
一!!!!  

1. Overview of Companies and Industry

 

Perform a comparative analysis of your two selected companies’ business operations and discuss the industry in which they operate. You must address the following questions as part of your analysis:

 

  • What do your companies make, sell or do? What are their key products and markets?
  • What is your companies’ size in the industry in which they operate? Choose industry relevant metrics to show (eg. level of sales, number of staff, total assets, funds under management, number of branches or stores, relative brand value, etc.)
  • How does your company’s performance compare to other companies in the industry over the last three years? (eg. profit and sales growth, market share trend, etc.)
  • Note any significant differences between the companies that may influence their risk profiles (product, business line or geographic mix differences that influence their risks).

不一定非要按照老师提问的顺序写,只要这个部分能够回答以上所有问题即可。

 

建议的思路:

从该公司在的产业入手(即先写第二个问题),写明industry以后指出该公司在行业内的地位(同时能够指出两家公司分别的products & markets-即第3问&第1问),再进行组内比较(第四个问题)在比较的时候主要从Risk的方面入手,比较产品,或者是产业链甚至是地域问题会影响到的风险等。

一般分为3个副标题,先写Industry引入然后A公司;B公司;二者比较(副标题如果更有针对性会有加分

E.g 比较的时候直接用发现的key risk different 命名,提出适当准确的论据)该部分字数约为700字左右

 

2. Risk identification

  • List the major stakeholders and explain their objectives for both firms. Are they the same stakeholders for both companies? Discuss any key differences and how this may affect risk identification.
  • Identify and describe the main strategic objectives of the two companies and discuss any similarities and differences and suggest how this might affect their identification of risks.

 

  1. 列出关键的利益相关者(客户,股东,供应商,员工)——具体在年报上面找,一定会有!!(一般在director claim之类的页面,不在财报部分,不要直接去搜stakeholder,具体到某一类)可以两家公司一起写而不是一个一个写,可以直接列出共同的和不同的进行讨论,不要写成流水账。
  2. 写出两家公司的战略目标(年报上会有,例如5年内要达到什么什么的一个水平),讨论二者的相似性

和不同点(比较为主)。因为两家公司在同一个行业内,针对不同的风险可能二者应对不同,比较的时候可以注意二者互相参考学习这样有助于写出在评估风险时的影响

这部分在600字左右

 

  1. Risk Analysis(以下二选一!!!不是都写。这部分含有图表,不算字数但是占分)

 

Select ONE of the following from TWO alternatives choices for your analysis.

Alternative A: Risk Taxonomy Comparison 参考W4&W5给出的表格图例根据年报自己写一份

 Using the risks disclosed in the annual reports:

 

  • Complete a detailed risk taxonomy for BOTH companies summarising and mapping their stated risks into either strategic, operational, financial or compliance/reputation

risks, and other subcategories of your choice. 用到W6-W8的教学内容-两个公司都要做,分别是两个表

  • Compare and discuss similarities and differences between the risk taxonomies of the companies including noting the difference in ranking of similar risks (Annual reports will disclose risks in descending order of importance unless otherwise stated by the firm). Consider and discuss possible sources of the differences including operational, regulatory, stakeholder or strategic reasons; 比较两个表,并且讨论一下同种风险的

等级差异(E.g 都是战略风险,A公司觉得评级在1级B公司觉得在4级,需要考虑在同类风险中不同来源的部分)

  • Complete a hypothetical consequence scale, a hypothetical likelihood scale and a hypothetical risk matrix for ONE of the companies (Note: If you choose Footwear and Accessories you MUST complete the risk matrix for Nike[1]);

参考W4提到的consequence scale & likelihood scale-自己设计,自己假设(自己编!但是要编的符合格式且参考财报)- 只写其中一个公司

  • Using this hypothetical risk matrix, rate the intrinsic AND residual risk of the three (3) highest ranked risks as reported by the company in its Annual report. Explain the reasoning for your choice; and,

风险矩阵(也是自己编-根据上一个问编)然后要写出3个对于这个公司来说固有风险和剩余风险都比较大的(要给出自己的原因-即公司哪里体现出这个风险大,也许是后果严重也许是频繁发生etc.)

  • Discuss the quality of the risk disclosure made by the companies from the perspective of an equity investor. Did one company do a better job at communicating? What further information would you recommend be added to the weaker company’s reporting?

讨论一下作为一个投资者你觉得公司在风险披露上做的如何,两家相比谁做的更完善一些,并对稍弱的公司提出建议。

Note: You may not be able to find detailed information about the risk levels for the risks identified by the companies. So, in order to answer this question, you may need to use the lecture material, recommended readings, and your own research to propose a reasonable hypothetical assessment.

 

 

 

Alternative B: Risk Analysis BOW-TIE为基础的风险分析只选择其中一个风险(子分类的细风险且必须两家公司都有且较为常见的)

 

Using the annual report risk disclosures, select ONE risk SUBTYPE that is common between your two companies (eg. Fraud subtype in Operational risk type), and:

 

  • Explain the nature of this risk discussing how it arises and what consequences it causes. You should reference the company’s own description of the risk and other

sources if possible; 描述一下这个风险本身,简述一下原因和可能的结果(引用公司对于该风险的描述)

  • Perform a detailed Bow Tie analysis of the risk highlighting both the causes and consequences of the risk involved. As part of this answer be sure to propose and explain your own hypothetical controls and their intended operation and position on the bow-tie. You should reference any treatments or controls the company has itself mentioned as well as your own ideas;

对这个风险用BOW-TIE的图进行分析,并且设立一些你自己假设的control

  • Using your bow-tie diagram, discuss what hypothetical Key Risk Indicators could be used to provide leading indicators of changing risk levels; and

讨论bow-tie 中的KRI(结合上一问的control)

  • Describe an AS ISO 31000:2019 compliant risk management process to manage this risk. Explain what risk management framework components you recommend to govern and manage this risk; and,

讨论process里哪些部分符合你分析该风险(我们3-5周 讨论的各个方面,即解释一下你的假设基于公司目的、环境,并且充分考虑了monitoring等等)解释Framework中哪些东西会涉及到你的Risk management(比如RA会用到)

  • Discuss the quality of the risk disclosure made by the companies from the perspective of an equity investor. Did one company do a better job at communicating? What further information would you recommend be added to the weaker company’s reporting?

讨论比较两家公司谁在风险披露上做的更好,并对较弱者提出建议

Note: You may not be able to find detailed information about the actual controls and risk management process used by the company (unless described in the annual report). So, in order to answer this question, you may need to use the lecture material, recommended readings, and your own research to propose a reasonable hypothetical approach.

 

这部分思路:把Bow-tie放到附录,然后正文中给出一个简单的描述(即看图说话,介绍了风险本身也指明了原因结果)。描述完Bow-tie主体后接着描述control的部分,选择1-2个说明KRI,一定要注意是leading,能够明显反映出风险变化的才算相当于以Bow-tie为基础作为整个部分的思维导图。

Word Limit

It is easy to write a lot in this assignment. Keep your discussion concise and use tables, charts and graphs to illustrate your arguments (it is a business report!). To save your word count, you can copy and paste tables as a picture.Remember to place large tables in the Appendix so that the body of your report is not interrupted for the reader.

 

 

     4.         Criteria for assessment

 

The following rubric provides information regarding the criteria that will be used in marking. Table 2 Assessment Rubric

    Unsatisfactory <50% Adequate 50% to 60% Satisfactory 60% to 70% Good 70% to 80% Very Good 80% to 90% Excellent

>=90%

 

 

 

 

 

 

 

 

 

Component

 

 

 

 

 

 

 

 

Marks

Available

 

 

 

 

 

 

 

Fails to satisfy the minimum requirements

 

 

 

 

 

 

 

Satisfies the minimum requirements

 

Demonstrates an average level of

understanding,

interpretation, originality,

insight and presentation

 

Demonstrates a high

standard of

understanding,

interpretation, originality,

insight and presentation

 

Demonstrates a very high

standard of

understanding,

interpretation, originality,

insight and presentation

Demonstrates an outstanding

or exceptional standard of

understanding,

interpretation, originality,

insight and presentation

Overview of the companies and industry  

 

20

           
Alternative A, B or C  

 

50

           
Report quality and compliance  

 

10

           
Quality of analysis performed  

 

10

           
Quality and breadth of research  

 

5

           
Originality 5            
TOTAL 100            

 

[1] The reason will become obvious when you read the Annual report for Adidas!