Introduction: Risks can also be bought and sold. If you want to start a business of buying and selling risks, the premise is that you must have an eye for risk, be able to see through risks that others cannot, and have a unique set of mechanisms to address this risk. There are too many risks in the business world, and buying and selling risks have become an important underlying logic that promotes the healthy operation of the entire business world. How to establish a risk management and control mechanism Part 1

Focus on building a dual prevention mechanism for enterprises

Each region guides and promotes various enterprises to formulate scientific safety risk identification procedures and methods, and organizes experts and all employees to Identify safety risks in production processes, equipment and facilities, operating environment, personnel behavior and management systems in an all-round and entire process. Scientifically assess security risk levels, establish an enterprise security risk database, and draw an enterprise's four-color "red, orange, yellow, and blue" security risk spatial distribution map. Based on the assessment results, security risks are effectively managed and controlled from organizational, institutional, technical, emergency and other aspects to ensure that security risks are always under control. Establish and improve the safety risk announcement system, strengthen risk education and skills training, set up safety risk bulletin boards in key areas, and produce job safety risk notification cards. Establish and improve the hidden danger investigation and management system to achieve closed-loop management of hidden danger investigation and management.

Improve the government supervision system with dual prevention mechanisms

Relevant departments of the State Council have formulated and improved general standards and industry norms for hierarchical management and control of safety risks and identification and management of hidden dangers. Provincial safety committees have Formulate implementation details based on the actual situation in the region. All regions and relevant departments organize an overall assessment of the safety production status of enterprises, and implement differentiated and precise dynamic supervision for enterprises with different risk levels. Organize a comprehensive identification and assessment of security risks in the public area, and draw a regional "red, orange, yellow and blue" four-color security risk spatial distribution map. Strengthen the control of the source of safety risks, strictly control the construction safety of high-risk projects, clarify the minimum production and operation scale standards for enterprises in high-risk industries, and promote the improvement of the overall safety assurance capabilities of enterprises.

Strengthen policy guidance and technical support

Comprehensive use of legal, economic and administrative means to support and promote the construction of a number of major safety risk prevention and control projects, key life-protection projects and hidden danger management demonstrations Projects, vigorously promote the implementation of the production safety liability insurance system, strengthen the construction of enterprise safety production integrity systems and joint departmental punishment, and further promote the construction of enterprise safety production standardization. We must promptly establish a fully functional comprehensive intelligent platform for production safety supervision, strengthen the use of facilities and equipment such as remote monitoring, automated control, automatic early warning, and emergency avoidance, and gradually realize information management of enterprise risk management and control and hidden danger investigation and governance. How to establish a risk management and control mechanism Part 2

The first step is to determine what risks may affect the project and describe these risks and their characteristics in clear documents. Generally speaking, risk identification is an iterative process, which is carried out separately by the main project members and the enterprise risk management team to identify possible risks in the project as much as possible.

Risk analysis is the second step in the four-step project risk management process and is the process of assessing the impact and likelihood of identified risks. Risk analysis can choose qualitative analysis or quantitative analysis methods to further determine the impact of the identified risks on the project objectives, rank the risks according to their impact, determine the key risk items of the project, and guide the formulation of the subsequent risk response plan.

The risk response plan is the third step in the four-step project risk management process. It mainly develops and formulates a risk response plan for the risks of the project, with the purpose of improving the chances of achieving project goals. The risk response plan includes the main risks of the project, the main response measures for the risks, each measure must have a clear person responsible for it, the required completion time and the progress status.

Risk monitoring is the fourth step in the four-step project risk management process. It mainly tracks identified risks, monitors residual risks and identifies new risks throughout the project, and ensures the project risk response plan. implementation and evaluate the effectiveness of risk response measures in reducing risks. Risk monitoring is a continuous process throughout the entire life cycle of the project. As the project progresses, risks will continue to change, new risks may appear, and expected risks may disappear.

Existing problems:

1) Problems with the operation strategy of the mechanism.

For example, should control give priority to progress or quality? Blindly pursuing quality may lead to a lengthening of the production cycle. Is the company willing to bear the resulting increased costs? If the company follows the market closely and pursues rapid entry of products into the market, the company will Are you willing to bear the possible decrease in quality and subsequent maintenance costs, or the possible costs of compressed construction schedules and frequent adjustments to plans? Here we need to pay more attention to the relationship between costs, risks and benefits.

2) The issue of standardization.

To maintain and optimize the internal risk management and control mechanism, it is necessary to establish the same standards as the "Organization Management Manual" to facilitate the subsequent cultivation and accumulation of experience of risk talents. This standardization includes standardization of process systems, standardization of professional knowledge, standardization of rewards and punishment assessments, and standardization of risk assessment.

3) Issues with team building.

Obviously, a development team with tacit cooperation, high overall ability and quality can complete project operations faster and better. The risk management and control team must provide cross-departmental assistance, and the efficiency of this assistance must require sufficient attention and resource support from the leadership.

4) Problems with internal communication within the enterprise.

The establishment and operation of any mechanism will inevitably have problems of one kind or another, and the resolution of problems depends largely on whether the communication channels are smooth and whether the communication guidance is effective. In the final analysis, processes and systems deal with how things should be done under normal circumstances. In abnormal situations, there is no process guidance and all that needs to be relied on is internal communication and collaboration.

Extended information:

Risk control refers to risk managers taking various measures and methods to eliminate or reduce various possibilities of risk events. Or reduce losses caused when risk events occur. The four basic methods of risk control are: risk avoidance, loss control, risk transfer and risk retention.

Basic method

Risk avoidance

Risk avoidance is the conscious abandonment of risky behaviors by investment entities to completely avoid specific loss risks. Simple risk avoidance is the most negative way to deal with risks, because when investors give up risky behaviors, they often also give up potential target returns. Therefore, this method is generally adopted only under the following circumstances:

(1) The investment subject is extremely risk-averse.

(2) There are other options that can achieve the same goal with lower risks.

(3) The investment entity is unable to eliminate or transfer risks.

(4) The investment entity is unable to bear the risk, or the risk cannot be adequately compensated.

Loss control

Loss control is not about giving up risks, but about formulating plans and taking measures to reduce the possibility of losses or reduce actual losses. The stages of control include three stages before, during and after the event. The purpose of ex-ante control is mainly to reduce the probability of loss, while the purpose of control during and after the event is mainly to reduce the actual loss.

Risk transfer

Risk transfer refers to the act of transferring the transferor's risks to the transferee through a contract. The risk level of economic entities can sometimes be significantly reduced through the risk transfer process. The main forms of risk transfer are contracts and insurance.

(1) Contract transfer. By entering into a contract, some or all of the risk can be transferred to one or more other parties.

(2) Insurance transfer. Insurance is the most widely used risk transfer method to help corporate risk managers eliminate or reduce the occurrence of risk events.

Risk retention

Risk retention, that is, risk taking. That is, if a loss occurs, the economic agent will pay it with whatever funds are available at the time. Risk retention includes unplanned retention and planned self-insurance.

(1) No plan for self-retention. It refers to payment from income after risk losses occur, that is, funding arrangements are not made before losses. When an economic entity is unaware of the risk and believes that the loss will not occur, or significantly underestimates the maximum possible loss that it realizes is related to the risk, it will adopt the unplanned retention method to bear risks. Generally speaking, no fund retention should be used with caution, because if the actual total loss is much greater than the expected loss, it will cause difficulties in cash flow.

(2) Have planned self-insurance. It refers to making various financial arrangements before possible losses occur to ensure that funds can be obtained in time to compensate for losses after losses occur. Planned self-insurance is mainly achieved through the establishment of risk reserve funds.

As China’s financial market continues to open up, the financial risks faced by commercial banks will also increase day by day. The core of competition among commercial banks in the future is competition in risk management levels. How to prevent and control the emergence of new financial risks, resolve existing financial risks as early as possible, and remain invincible in the competition with multinational banks are currently urgent issues that my country's commercial banks need to solve.

Notes

1. Management and control of corporate investment projects

Implement classified management of personnel, entities, and long-term and short-term investment activities, and plan to create three types of investment projects at the holding level Large investment and financing platform, Lifan Co., Ltd. entity investment, Lifan Finance Company financial investment, Lifan Real Estate real estate investment.

Main investment philosophy: It doesn’t matter how much money the project makes, what matters is whether it can be earned. The project cannot be completed without planning the financial chain. Implement assessment and supervision of investment projects, and strengthen the assessment and analysis of return on assets. Projects with poor market performance and poor profitability must be closed at all times. Strengthen the management and supervision of infrastructure projects, including pre-bid bidding, ongoing construction management, and post-event benefit analysis.

2. Strengthen financial control

Improve the financial reporting system and financial early warning system, improve financial analysis and reporting levels, deepen financial support and monitoring of business, and transform financial information into effective decision-making reference information.

3. Management and control of accounts receivable and inventory

The reason why many motorcycle companies are in decline is that their credit amounts are too large. Strengthen the management of domestic and foreign accounts receivable and inventory. Management is the embodiment of our business capabilities, and we must have the concept of comparison with the industry.

4. Simplify the organization and save costs

The organizational structure should be flattened and all work should be centralized to save costs. For example, finance should be based on reimbursement, taxation, accounting, assessment, etc. Groups, rather than corporate divisions.

5. In-depth implementation of opportunities to improve management and optimize efficiency discovered during internal control and audit work, and strengthen the design and implementation effectiveness of process control.

6. Strengthen the performance appraisal and target responsibilities of company managers.