Corporate Risk Management: Identification, Assessment, and Response to Risks in AstraZeneca, EE, and Royal Bank of Scotland

This report discusses the identification, assessment, and response to risks in AstraZeneca, EE, and Royal Bank of Scotland. It covers the risks faced by each company, their responses to these risks, and how they communicate them to stakeholders. The report also provides insights into the tools and techniques used by companies to minimize financial losses related to business risks.

Corporate Risk
Management

Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Identification and the assessment of risks related to different businesses...................................3
Response of the risks by the organisations..................................................................................6
Communication of the risks to different stakeholders.................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The corporate risk management of the business refers to the tools and techniques which are
used by the different companies to minimize the financial losses which might occur in the
business. The following report highlights the case of three companies majorly working in the
UK. The first part highlights the identification and the assessment of the different risks in the
business. The second section determines the response the company is giving to these different
risks and the third part provides information related to the reporting of these risks to the
stakeholders. Business risk refers to exposure of company or business concern to various factor
that will affects the profitability of the banking business or sometimes leads to failure(Alam,
Ramachandran and Nahomy, 2020). In short business risk can be defined as any factors that
threatens the ability for the organisation of achieving its goals and objectives. The three
businesses discussed in the report are:
AstraZeneca is a British-swedish MNC working in the field of Pharmaceutical and
biotechnology. It is headquartered in Cambridge, England. EE is a British company which
provides services related to internet and mobile network operator. It is the second largest mobile
network operator. It is started in the year 2010. It has its headquarter in Hatfield, England. It
provides 4G and 2G services with double speed to most of its target area. This report includes
the assessment of the risk to EE and there are different models to identify the risk is also entailed
in the report. The Royal Bank of Scotland provide personal banking products to their customer
such as opening of bank accounts, mortgages, loan facility, availability of credit cards to
customer etc(Barauskaite and Streimikiene, 2021)
. Royal bank is one of the major and retail and commercial bank situated in Scotland. There is a
merger between national and commercial banking group having almost 662 branches in Scotland
and from there the holding company is remained as the Royal Bank of Scotland in 1979 and
became the new company in July 2020.
MAIN BODY
Identification and the assessment of risks related to different businesses
Following are the risks identified in the businesses:
AstraZeneca

AstraZeneca is facing 29 different risks that they have reported. The business is required to
manage the risks related to the business and provide assurance to the different stakeholders of
AstraZeneca. Following are the three main risk faced by the management of AstraZeneca.
Failure to meet development targets:
This is one of the major risk that is dealt by the business of AstraZeneca. The development
related to any pharmaceutical product is a long and complex process (Baruah and Panda, 2021).
It involves huge financial investments in the field of research and development. The targets
related to the development of the business gets highly affected due to the volatility of the
products development. This risk is related to the operations risk that arise in the business.
Delay to new product launches:
The patenting plays a vital role in a pharmaceutical business. Due to the patenting of different
medicines around the world. The business is not able to bring new products into the market and
the launch takes huge time due to the risks related to products and research related to the same.
This risk is related to the product risk of the business.
Price controls:
The pressures related to the controlling of price is real and the business of AstraZeneca needs to
cover the costs in these prices. This creates a major threat as the liquidity position of the business
is affected and they are legally bound to provide cheaper products in the market(Buyukkara and
et.al., 2019). The prices of the medicines are required to be controlled but it creates one major
issue in the working of the business of AstraZeneca. This risk is related to the revenue risk which
is related to the business.
EE
EE (Everything everywhere): The risk assessment involved in the EE is data integrity and
confidentiality. The data involved in providing services to the customers is highly insecure.
There is certain information which is not available to the general public because it is a restricted
content. Sometimes the content which is restricted got published by unfair means. This practice
loss the trust of the public and reduces the overall profits of the firm.
There are several risk identified by the telecom communication.
a.) Operational risk – The operational risk relates to the day to the day activities of the
organisation. There is risk of managing, supervising and giving technical advice on the matter of

system which runs the telecommunication. There are various peripheral equipment and
troubleshoot problems in installing the system (Chang, Hsu and Lin, 2018).
b.) Financial risk -The financial risk refers to the inability to pay the debts which loses the high
market share. There is a high risk of fraudulent activities. Many firms can take the franchise of
the EE which later on, deny to repay the amount in consideration.
c.) compliance threats – It is a threat which occurs when the organisation fails in adopting the
legal structure and laws framed by the government of a specific country. The EE has to follow
Communication act, 2003. There are various procedures and legal framework which are required
to be adhered by the organisation.
d.) Strategic threats – It is a threat which is occurred due to the external factors. It disturbs the
strategic vision of the organisation. When there is a change in the technology, it becomes
difficult and expensive to cope up with the advanced technology.
Royal Bank of Scotland (RBS)
Banking industry is facing variety of risk which includes risk of payment as trading has been
carried out internationally. The importers want to purchase or receive their goods on time
whereas the exporters need their fund on due course. Further they are exposes to foreign
exchange risk due to fluctuation in exchange rates. Royal Bank of Scotland is working
internationally therefore there is a challenge arises with respect to international trade practices as
baking industry has wide standards and they are confusing too (Chintrakarn , Jiraporn and
Treepongkaruna, 2021). One of the major risk faced by banking industry is credit risk which
involves evaluation of credit worthiness of the counterparty in addition of risk of changes in
interest rate, risk of international trade with different countries and foreign exchange risk dealing
with different currency. The Royal Bank of Scotland carried out assessment of risk on regular
basis by following ways: -
 Proving the business concerns with bank guarantee and standby letter of credit which
gives them additional protection with respect to their business or customers.
 The letter of credit which provides them a secure settlement and also helps in reducing
the risk with for not making the payment after the goods are delivered.
 Documentary collections provide the better way in order to make and receive payment at
the time of international trade. In the documentary collection the exporter submits
shipping documents when they received goods.

The major risk faced by the bank is broadly classified into the following categories: -
 Credit risks which occurs when borrower fails to meet the obligation relating to contract.
 Operational risk which includes loss due to errors or interruption or any type of damage
which is caused by system, processes or customer.
 Market risk which is related to capital markets when banking activities are related to such
market.
Response of the risks by the organisations
The response related to the risks discussed above by the business of AstraZeneca are discussed
below:
 The response to the risk related to not meeting the development targets by the
management is that the business initially sets the targets to a little low. To cater to the
operations, risk AstraZeneca focuses on measuring the real threat that this put on the
working of business. The development of the business is set to move slowly. The
business attains all the necessary information related to the business and its competition
from the outer sources and plans their further course of action accordingly.
 The delay in the new products is responded by providing different varieties of the
products in the market. The product risk is majorly controlled with the help of research
and development (Choi, Park and Kim, 2020). The business tries to attain the patent
rights and with the help of research and development, it tries to install a better and
advanced approach to meet the demand in the market and bring such products which
would make the revenue of the business higher.
 The price controlling of the products of the business is majorly not in the hands of the
business to provide for. The business of AstraZeneca finds different ways with which
they can reduce the costs related to the operations. To cater to the revenue risk, the
business of Astrazeneca diversifies the product mix and produce such goods which does
not have price control in the market(Filbeck, Robbins, and Zhao, 2022). The business is
finding more optimum ways to make their supply chain more efficient that they can
reduce these costs. The major response to deal with these finance risk is that they reduce
the costs related to the operations of the business.
EE

Risk exposure – it is the process of measuring the risk which will be occurring in the future from
a specific activity or task. The response to the risk exposure can be described as given below:
1. It is necessary to quantify the risk depending upon the priority of the organisation. EE can
safeguard from damaging its physical assets by ensuring regular check on the hardware. The
physical assets such as passive telecom equipment which is wireless towers, fixed line ducts and
conduits(Gendron, 2018). It requires high maintenance of the hardware required to render the
services of the telecommunication.
2. The risk of software and system failure can also be occurred in the telecommunication
industry. It can be minimised by employing new technical staff which is competent in solving the
technical issues. The evolution of the 5G technology, edge computing, advancement in the
artificial intelligence and Internet of things makes a big challenge for the internet and mobile
operator.
3. The license of the organisation is allotted to various organisation in return of the license fees.
The fees provided by the licensee is a source of revenue for the EE. It has to keep check on the
payments provided by the licensor. It aids in reducing the financial risk of the company.
There is a five step risk management model which helps in measuring the business risk. It
can be described as given below:
1. Risk identification: The first step is to identify the areas of higher risk which cannot be
mitigate easily and need to be considered by the organisation. In context of EE, it has to identify
whether the speed is constant of the networks or not. It is greater risk are its competitors such as
claro, teletalk and Dhiraagu. It has to identify the strategies of other firms dealing in the
telecommunication industry.
2. Quantitative risk – it is a form of risk which can be termed in the numerical value. EE has
negative impact of risk on the profitability and revenue of the organisation. It reduces the
financial profit of the organisation.
3. Qualitative risk – It is the risk which cannot be defined in numerical form but indirectly
impacts the organisation (Hussain, Fatima, ur Rashid and Hassan, 2021).
4. Risk response planning – The planning of the risk is necessary to minimise its impact. The
proactive measures of the risk identification assist EE in stabilising the working of the company.
5. Risk monitoring and control – The risk monitoring involves the finding deviations and
taking remedial measures to correct the same.
Royal Bank of Scotland (RBS)

The major problem arising at the time of establishing risk management system is first of all make
choice between centralised and decentralised structure. There is a trend globally with respect to
centralised risk management with proper treasury management system that helps in netting of the
risk exposures and readily reporting to top management of banks. In order to mitigate all kinds of
risk the bank will hold its capital to order to mitigate risk of losses. The bank will reduce its
operational risk by building of effective ORM capability that will have full access of bank
existing risk profile and it will develop a database along with a road map for internal and
external events related to risk. Further the bank will mitigate its risk relating to market by
hedging its portfolio to mitigate interest rate risk and currency risk(Jia 2018). The bank of
Scotland will mitigate their liquidity risk will the help of regular financial planning that help in
forecasting the cash flow on regular course of interval and help in optimizing the working capital
and extending the credit facility. The robust banking system are those that in the short period
identify the risk.
Communication of the risks to different stakeholders
AstraZeneca
An efficient communication to the shareholders of the different happenings in the business is a
major aspect in any business. It increases the awareness and the value to the shareholders related
to the business of AstraZeneca. The investment community requires the information related to
the risks that the business is currently facing as these determine their decision making in the
organisation. There are different reports which are used by the business of AstraZeneca to
provide the information related to business to its stakeholders. It issues a sustainability report
which provides the information related to the strategy and the governance of the business of
AstraZeneca. This major report is concerned with the use of sustainability and how different
risks of the business are provided for. The mentions the information related to the path business
acquires and the approach they take to operate in the market of pharmaceutical. Different
strategies and values are discussed and the investors of the business may assess the working of
the business in a way which would help them to attain the decision related to the business of
AstraZeneca (Shahrour, Girerd-Potin and Taramasco, 2021).
EE

1. The various stakeholders of EE such as investors, government and other financial
agencies use information related to various risk for planning their strategies accordingly.
For instance, investors check the amount of risk involved in the organisation to take
decisions related to investing. Thus, it is necessary to inform the risk profile of telecom
company to all its stakeholders (Yuan and et.al., 2020).
2. Physical risk – it relates to the factors present in the working environment which harm
the health of the personnel. There is a variety of risk such as installation of the network
signals and circuits carries huge risk which may cause serious injury to the health of
personnel.
Royal Bank of Scotland (RBS)
It is important to communicate risk to stakeholders as they are owners of the bank and the
effective banking communication will strengthen the relationship between customers, suppliers,
stakeholders, employees and board of directors. The bank uses different modes of
communication through channels as the communication has been the critical aspect because it
includes important updates and issues which must be reported regularly to stakeholders(Süsi and
Lukason, 2019). Further at the time of operational changes and effective communication plays a
Vital role that support the banks and its relationship with their regular customer. Regardless of
size and complexity the bank of Scotland has, they used extensive methods to communicated to
their stakeholders. It is important for them to maintain appropriate level of security and privacy
in order to comply with banking rules and regulations. Reporting to stakeholders is important
because only banking institution will invest in the project but also stakeholders to invest their
funds. External shareholders having the most influence on long and short term growth of project
that bank of Scotland undertake (Zhang and et.al., 2020).
CONCLUSION
From the above-mentioned report it can be concluded that, risk assessment and responding to
these risks is one urgency and crucial for any businesses. The industry the business is working in
does not mean that the risk may be less or more. Every business working deals with high risks
related to different factors.

The Astrazeneca has to acquire different patents related to biotechnology and
pharmaceutical products to reduce the effects of these risks. Every risk has certain solutions for
its mitigation. The EE takes various remedial measures such as safeguarding the physical assets
of the telecommunication industry. The risk of system failure can be solved by recruiting the
professionalised person in IT sector. There are various sources of revenue for EE. Thus, EE has
to be check on every source of income so that default risk can be minimised. In this report Royal
Bank of Scotland risk has been analysed with respect to risk associated at different categories.
This report highlights about the different types of risk they face and how they mitigate or reduce
those risk in the considerable period of time. At the end of this report reporting has been made to
shareholders relating to various type of risk faced by Royal Bank of Scotland.

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