Professor Margaret Woods
Nottingham University Business School
Date: 1 December 2009
Time: 1:00pm - 2:30pm
Venue: CARR Seminar Room, G305
The financial crisis has pushed risk management up the agenda of not just company directors but also national and international politicians and regulators. Increased monitoring and regulation, however, offers no guarantees that risk management will improve in practice, particularly if it results in mere box ticking rather than management which is sympathetic to the changing business environment.
The International Federation of Accountants (IFAC) defines risks as "uncertain future events which could influence the achievement of the organisation's strategic, operational and financial objectives" (IFAC, 1999). Performance management systems are used to track organisational performance relative to objectives and so, applying the IFAC definition of risk, it would seem that risk management and performance management share common ground at least in theory. This paper provides evidence that, in practice, at the level of the individual organisation there are few explicit attempts to integrate the performance and risk management control systems, except within the public sector.
Using case study evidence from five major UK based public and private sector organisations the paper argues that the public sector can teach the private sector a number of important lessons about risk management. More importantly, it offers evidence of a spectrum of practice that ranges from total synthesis of risk and performance management to a world in which they sit almost entirely independent of one another. The explanations for such variations in practice lie in a range of factors which significantly extend existing contingency theory. These include the intensity of regulatory oversight within a given economic sector, the degree of supply chain complexity, key personalities within senior management and the organisational culture.
About the speaker
Margaret Woods is Associate Professor of Accounting & Finance at Nottingham University Business School. She is the founder and co-ordinator of the European Risk Research Network, funded through the EU's Marie Curie programme. Her current research interests lie in the areas of risk disclosures in the banking sector, the problems of fair value accounting and audit in financial services, and public sector performance management. Margaret has been both sole author and co-author of papers published in journals such as Accounting Organizations and Society, Management Accounting Research, Finance Accountability and Management and Managerial Auditing as well as various ICAEW and CIMA journals.