Tag Archives: risk

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Taking the “overpay” out of M&A

There are many reasons why companies pay too much in M&A transactions—but few legitimate excuses. Here’s a look at what boards can do to minimize their risk
By John Caldwell
December 13th, 2017

Not a quarter goes by that we don’t hear another corporation announcing an asset writedown related to a previous acquisition. For example, earlier this year Valeant Pharmaceuticals International Inc. (TSX:VRX) took a $1.1-billon writedown of goodwill arising from several acquisitions. … Continue reading

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Weathering the storm

Insider: Nick Wildgoose
October 6th, 2017

Who Nick Wildgoose, global supply chain product leader, Zurich Insurance Group; chairman of the Supply Chain Risk Leadership Council; former non-executive director of the Chartered Institute of Purchasing and Supply. Involvement Wildgoose, based in London, consults with companies globally on … Continue reading

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Beating back trouble

Special Report on Risk: Social media, business complexity and widening stakeholder interests are changing the speed, scale and scope of crisis management. Is your board keeping up?
By Jim Middlemiss
October 5th, 2017

As crisis moments go, the announcement by Home Capital Group Inc. (TSX:HCG) last Feb. 10 that it had received an enforcement notice from the Ontario Securities Commission calling out its 2014 and 2015 continuous disclosure practices couldn’t have seemed much … Continue reading

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Disrupt or be disrupted

When no industry is immune to disruption, that reality must become the pervasive theme for thinking about strategy in every enterprise. Either you seize the opportunity or fall victim to the risk
By John Caldwell
October 5th, 2017

In a recent interview, Dr. Dieter Zetsche, the managing director of Daimler AG, said his company’s competitors are no longer other car companies but Tesla, Google, Apple and Amazon. He went on to say that software would disrupt most traditional … Continue reading

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Enterprise risk: where does a board’s role end?

Lack of management objectivity makes it incumbent on boards to go beyond their traditional oversight role in several key areas of enterprise risk management. The payoff: reduced exposure and better performance
By John Caldwell
August 3rd, 2017

Ordinarily, the delineation and segregation of responsibilities between management and the board is relatively straightforward. While boards ultimately carry the over- arching responsibility for the enterprise, management is tasked to manage the affairs of the business. In practice, this generally … Continue reading

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The EBITDA fallacy

Securities regulators in Canada and the U.S. are taking a harder line on non-GAAP disclosures and this columnist agrees, calling for an “old school” approach where profit and cash flow reflect reality
By John Caldwell
May 19th, 2017

The photo of the individual who concocted the concept of EBITDA should be prominently displayed on a wall of shame in every commercial centre worldwide. EBITDA, in case you’ve forgotten, is short for Earnings Before Interest, Taxes, Depreciation and Amortization. … Continue reading

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Who’s writing your climate narrative?

We hear a lot about climate-related divestment in energy, but investors are paying increasing attention to climate change risk in all sectors. If your disclosure is poor, it leaves you offside and out of the loop
By Mai Nguyen
May 18th, 2017

On Easter Monday, Suncor Energy Inc. quietly released a 15-page report that laid out several plausible climate futures and how it plans to stay “climate resilient” in a low-carbon economy. In a note addressed to shareholders, CEO Steve Williams wrote: … Continue reading

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Reform follows dysfunction

The consequences for an enterprise with a dysfunctional board can be devastating. To make things worse, identifying the problem isn’t easy and fixing it takes courageous leadership
By John Caldwell
December 19th, 2016

Dysfunctionality in the boardroom, while somewhat difficult to define, may be best characterized by U.S. Supreme Court Justice Potter Stewart’s famous expression, “I know it when I see it.” Board dysfunctionality is a step function higher (or lower, depending on … Continue reading

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How to avoid pitfalls in CEO succession

Managing and mitigating leadership risk through the hiring of the right CEO is the board’s No. 1 job. A thorough process, alert to bias, fills the bill
By John Caldwell
October 11th, 2016

Witnessing the 2016 U.S. election campaigns from north of the 49th parallel brings a whole new meaning to leadership risk. Bizarrely, 24 months of intense campaigning and billions of dollars later, the U.S. electorate will choose their leader from two … Continue reading

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Beware the weakest link

As business ecosystems become more integrated and the number of third-party partners and suppliers grows, supply chain risk should be a top-line agenda item for directors and management alike. Our report, with a five-step guide for boards, can help
By Jim Middlemiss
October 10th, 2016

When the world’s seventh-largest container shipping line, Hanjin Shipping Co., filed for bankruptcy protection at the end of August, it left retailers, manufacturers and resource companies around the world scrambling and fearing the worst. Dozens of container-ships and tankers carrying … Continue reading

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Rethinking reputational risk

Warren Buffett rightly observed, “It takes 20 years to build a reputation and five minutes to ruin it.” Yet even as many directors try to heed those words, boards still miscalculate their reputational exposure
By John Caldwell
May 30th, 2016

According to Deloitte’s 2014 Global Survey on Reputational Risk, 87% of executives surveyed rated reputation risk as more important or much more important than other strategic risks their companies are facing. In addition, 87% say their companies are explicitly focusing … Continue reading

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Successful M&A hinges on board discipline

A rigorous framework for board oversight of M&A can help companies boost their chances of dealmaking success—and, just as importantly, steer clear of flawed transactions that leave acquirers in the hole
By John Caldwell
December 15th, 2015

“Opportunity,” “uncertainty” and “risk” are three words that go hand-in-hand when considering a mergers and acquisition strategy. While acquisitions can offer unique opportunities for growth and add significant long-term value, they are by nature complex and fraught with risk. Typical … Continue reading

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Bad strategy or execution? How to know which

Your company rolled out a big, new initiative, results are underwhelming and the board needs to know what happened: time for some advanced metrics
By John Caldwell
October 11th, 2015

Most directors understand that the cornerstone to achieving shareholder value is effective formulation and execution of strategy. Boards typically spend considerable time in overseeing strategy formulation yet many fall short, after the fact, in allocating sufficient time and using appropriate … Continue reading

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Oversight means line of sight

Most companies get that risk management and oversight these days are top priorities. But do all of them really get it when it comes to building that risk function and ensuring it has clear line-of-sight reporting to the board?
By Paul Brent
October 11th, 2015

While executive pay probably still commands the most public attention among hot-button governance issues, for the majority of directors and executives, risk is now its equal among top priorities. What’s more, identifying, tracking and mitigating risk will likely be the … Continue reading

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Same goals, opposing timelines

Mitigation and response strategies are inseparable partners in enterprise risk management. But their design and execution are in no way alike
By John Caldwell
July 28th, 2015

Enterprises face no shortages of risks everyday, be they external or self-inflicted. An effective enterprise risk management system has both mitigation and response strategies designed to lesson the impact of any material adverse exposure. This column provides a closer look … Continue reading

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