Risk Assessment Report on Trading.com

Governance, Ethics and Sustainability

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Table of Contents
Introduction...............................................................................................................................2
Growth-related risks..................................................................................................................3
Organisational Culture Risks......................................................................................................4
Risks associated with information handling..............................................................................5
Conclusion..................................................................................................................................7
Recommendations.....................................................................................................................7
References..................................................................................................................................9

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Introduction
Trading.com is a company founded by Jospe Drake, and it offers a range of services to its
customers relating to stock trading. The enterprise provides investment advice to normal
people through its courses, and it also offers on-going mentoring services to them after they
have invested in the market. The corporation is rapidly expanding its operations in many
areas of Australia such as Melbourne, Sydney, Brisbane and Adelaide.
Purpose
The purpose of this report is to prepare a risk assessment report on Trading.com in which
the Risk Exposure Calculator (REC) given by Robert Simons will be used. This report will
focus on identifying a range of risks which are faced by the company and ranked them in
order to provide recommendations that will assist the company in managing its risks.
Method
The REC enables companies to identify various risks to make sure that they manage them in
a timely manner to promote the profitability of the enterprise. Simons (1999) provided that
corporations can receive a score between 1 and 5 in which 5 is the highest score to
determine the intensity of the risk faced by them (Simons, 1999). If they score above 35,
then they are in danger zone, and they have to implement policies to address these
challenges. A score between 21 and 34 is a caution zone in which companies have to
improve their operations to reduce their risks. A score below 20 is considered as safe. This
report will use the REC to identify risks faced by Trading.com and provide recommendations
to address those challenges (Simons, 1999).

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Growth-related risks
 Performance pressure
Due to growth in the rate of competition between enterprises, it has become difficult for
companies to generate a competitive advantage in the market; corporations are forming
their employees to improve their performance which creates pressure on them (Groen,
Wouters & Wilderom 2012, pp. 120-141). Trading.com has implemented similar practices by
implementing a commission based system in which employees receive pay based on their
performance. The targets set for employees are considerably high, and they did not have a
say in those targets. Drake emphasised on the importance of the performance of its
employees for the success of the employees. If employees work under pressure, then they
are less likely to sustain their growth for a specific period of time. Thus, Trading.com
received 4 points in this field because the company has created substantial pressure on its
employees. One point is reduced due to the latest decision of the management to offer
$30,000 to employees as annual pay which reduces their pressure.
 Expansion rate
Business expansion allows companies to make sure that they implement policies which are
targeted towards expanding their customer base that leads to increase their revenue
streams (Nguyen, Newby & Macaulay 2015, pp. 207-227). The enterprises that adopt these
policies are likely to succeed in their respective industries. Trading.com has adopted
aggressive expansion policies since it focuses on increasing its operations in different parts
of Australia despite the fact that it has not hired enough employees to manage those
operations. Expansion of operations without the availability of adequate human capital
could be disastrous for companies since it becomes difficult for them to continue building a
positive relationship with their customers (Kumar, Gaur & Pattnaik 2012, pp. 175-192).
There are only 100 employees of Trading.com that manages its operations in four areas. The
company receives 5 points in this field because the number of consumer complaints is
increasing and they are reporting poor services from consultants after they enrol for the
courses.
 Inexperience of employees