Papers Category:Securities Finance Papers
- Company Research Papers
Post Time:2012-5-10 11:42:00
[Abstract] With China's rapid economic development and global economic integration, smooth acceleration of the process, the company in the social and economic life in China play an increasingly larger role. The existence and development of the Corporation is not only related to the Corporation interests, but also the relations within the group members and group companies overall competitiveness and economic strength, however, with the Group, the company continues to grow and develop, the risks faced by increasing risk prevention, control and management become a group company in China need to be resolved a major issue. In this paper, the author Haicang Investment Group Co., Ltd. (hereinafter referred to as the "sea Investment Group" years of work experience, first on the causes of increased risk of group companies in China are analyzed. then pointed out that the main problems in the risk management of our group companies, and finally coping strategies on how to strengthen the Corporation's risk management.
[Paper Keywords Corporation, business risk, financial risk, risk management, countermeasures I.
Group Company means the Commonwealth of enterprise legal capital as the main link link, common behavior norms of the group charter parent company, subsidiaries, joint stock companies and other member companies or organizations composed of a certain size. In this consortium, the parent company of the Group's internal controls, the others are the object of the parent company through the corresponding institutional arrangements, subsidiary production and management and financial control and access to the corresponding interests, in order to play within the group financial, management, operation and other aspects of synergy. With the acceleration of world economic globalization, the integration process, the risks faced by the group companies in the market economy environment, growing wider risk management has become a group company in China need to be resolved a major issue. the author of the Haicang Investment Group Co., Ltd. (hereinafter referred to as "sea cast Group registered capital of 1.428 billion yuan, the main business involves the five sectors of the trade and logistics, real estate, tourism development, management, service affiliated with the investment in Xiamen Haicang Bonded Port Construction Management Co., Ltd., Xiamen Haicang Land Development Co., Ltd., Xiamen Sea Real Estate Co., Ltd., Xiamen the Haicang Tourism Investment Group Co., Ltd., Xiamen Haicang Economic and Trade Development Corporation and other five wholly owned subsidiary. With the increasing complexity of the rapid expansion of the sea Investment Group scale and organizational structure, operating risk and financial risk faced by the Corporation are growing wider. Therefore, the first group company in China and increased risk of the causes of analysis, then pointed out that the main problems in the risk management of group companies in China, and finally coping strategies on how to strengthen the Corporation's risk management.
Second, the causes of increased risk of group companies in China
With the expanding scale of operation of the Corporation, the various risks they face growing wider, and even a threat to the survival of the group companies in order to respond effectively to various risks, it is necessary to correctly analyze the causes of the Corporation increased risk of In general, the risks faced by enterprises in production and operation process can be divided into two kinds of business risks and financial risks. operational risks mainly refers to the business uncertainty the risks from the production, mainly by the market, production costs, as well as The production technology is not deterministic. financial risk from a narrow sense, it is mainly caused due to corporate borrowers risk. Therefore, we mainly from these two aspects of the risk of group companies increase causes were analyzed:
(A group company in China and increased risk of Causes
An appropriate diversification strategy to increase the operational risks of the Corporation and the majority of our group companies in order to reduce the Corporation's overall business risk, tend to choose a diversified business strategy, and that it is conducive to the stable development of enterprises, however, blind inappropriate diversification strategy but increased the risk of a group of companies operating in diversified business strategy, the company is bound to spend some resources to explore unfamiliar areas and industries, which virtually increase business risk and many of the group companies spend a certain amount of resources into new areas and did not form a sufficient competitive advantage, there is no good core business and diversified business development, which will lead the group companies lost their a pillar industry, and then dispersed to various resources of the Corporation, to increase the operational risks of the Corporation.
2, multi-level corporate governance structure to increase the operational risks of the Corporation, the company is facing many of the subsidiary will not encounter problems in risk management. The majority of our group companies prevalence of multi-level corporate governance structure and property rights chain long, which makes between the Corporation and each subsidiary of the existence of the business objectives of each subsidiary and the contradictions of the Group's overall development strategy: Group, a subsidiary of, often between the sub-sector for their own independent the needs of the interests of the legal entity, it is more concerned about is to improve their production and business activities, the pursuit of short-term results of operations for this purpose, the subsidiary often within the group between the interests of the game, this game often leads to the Group is unable to risk management, collaborative management, the Corporation as a subsidiary of investors, committed to the entire Group's capital management and investment planning, the pursuit is to maximize the value of the Corporation, and sometimes out of the interests of the group as a whole to consider take some of the development strategy may conflict with the Group, a subsidiary of short-term business objectives. if the lack of necessary support and guidance of the Group's subsidiary, the subsidiary will be the lack of identity of the group companies, the company will lack management authoritative way, even if the Corporation is vigorously centralized management, the branch decision-making group companies have enforced selectively, not even implemented, this situation will inevitably lead to the overall interests of the Corporation, eventually leading to the operational risks of the Corporation plus big.
(Two causes of Corporation Finance in China and increased risk of
A diversification strategy to increase the Corporation's financial risk diversification strategy not only increased the operational risks of the Corporation, will also increase the financial risk of the group of companies, because the diversification of the Group companies in order to into other industries or fields, you need to spend a lot of money, if the own funds of the Corporation, and often only way to raise funds to achieve diversification strategy required to take the borrowing. Therefore, the high prevalence of asset-liability ratio of China's Corporation phenomenon, leading to a small proportion of most of the Group's internal financing and external financing ratio is too large, making the Corporation the financial burden of a heavy, a serious shortage of solvency, leading to increased financial risk. Internal diversification of financing methods, complexity also increased the financial risk of the Corporation.
Corporation, a subsidiary with legal status can be shared to some extent, their own financial risk, but within the entire group due to cross-cutting holdings, investment behavior, resulting in a complex relationship between equity or related party relationships, which easily lead to financial risks in the Group internal amplification, the spread of the Group within the company among the members of each other, loan guarantees, financial intermediation and other acts, easy to causing a chain reaction of financial risks within the group, thereby increasing the Corporation's overall financial risk. especially the case when the form of a guarantee by the parent company, subsidiary of the loan, if the subsidiary is facing a financial crisis can not be debt service due, the parent company must meet the guarantee, the assets of the Corporation is a subsidiary of debt, this will often drag entire group into the debt quagmire. 3, analysis of financial early warning indicator system is imperfect, the lack of prior financial early warning mechanism.
Risk refers to the degree of change in a certain period of time may occur in a variety of results under certain conditions, it will bring the benefits exceeded expectations, at the same time produce the desired outside of the loss from the narrow sense, financial risk is mainly due to debt and other causes, although it is caused by many uncertainties, but the financial risk is not any sign of a company's financial risk will be able to by the company such as profit solvency, asset operation and ability to develop potential indicators of prior warning, but the majority of our group companies have not yet sound financial early warning indicator system for, nor the establishment of short-term financial early warning system, not to mention the long-term financial early warning system of financial risk early warning mechanism obviously can not keep to the development needs of group companies have also increased the exposure of the group of companies.
Third, the group company in China risk management Risk management is the minimum of the risk management process in a risk-free environment.
The majority of our group companies there are still some inadequacies in risk management, these inadequacies in the performance of the following aspects:
(The development needs of an internal control risk management system lagged behind the group of companies
Comparison with the Western developed countries, the majority of our group was founded late, lack of management experience of the group companies, anxious, over-emphasis on expanding the scale of assets, and improve economic efficiency in the development process, ignoring the risk management system with sound: Some Corporation has developed a number of risk management systems, but when the establishment of new institutions, or start a new business, without the timely development of new risk management systems and risk management procedures, risk management lag phenomenon, some Corporation as operating conditions change and business development, previously developed risk management systems no longer meet the needs of the development of the Corporation, but did not timely revised and improved, resulting in the risk management system exists in name only, a mere formality, some groups internal risk management and construction to the lack of systematic, too much attention to the formulation of rules and regulations, lack of overall balance and coordination, the fragmentation pattern of the management system led to the dispersion of risk management, out of touch, contradictions inefficient, and many other issues. Some of our group companies there is no separate set of risk management departments, risk management under the leadership of general manager or other department, making the risk management department and a certain lack of independence and authority, has failed to effectively carry out specialized risk management, risk management systems lack the flexibility and adaptability to new management blind spots lead to new risks and losses, the loss of the efficiency of risk management. Share Free paper Download Center http://eng.hi138.com
(b Group companies do not play a synergistic effect of the financial management
The company should have through the raising of the funds of the Corporation, the investment, use and distribution to be managed to enhance the Group's overall funds utilization, streamlining management organizations and personnel, save management costs, but in reality, many of the Corporation does not really play group companies should manage synergies, but With the expanding scale of the Corporation, there the one hand, the Corporation continued to increase external financing, the debt ratio has been rising, the other hand, the internal funds of the Corporation scattered, inefficient use increased expenses, serious waste problem. In addition, some of our group companies to adopt the diversification strategy in pursuit of the expansion of the scale or looking for a new economic pillar point, unrealistic, but the rapid expansion of diversification strategy scattered Corporation manpower, material and financial resources, making the group company management can not effectively play the management synergies, not to mention risk management collaboration.
(Three risk assessment procedures and methods can not meet the need of the Group's risk management
Risk assessment requires the Corporation to identify, the business activities of the Systems Analysis and Implementation of the internal control objectives related to risk, reasonable to determine the process of risk response strategies. Risk assessment is the basis of risk management, but many of our Group companies in the risk assessment can not be the proper use of risk assessment procedures and methods, and thus can not identify and analyze the key risks and opportunities and to achieve the business objectives of the Corporation, which led to the risk of laissez-faire and expand, resulting in losses to the group company, to increase the risk of the business of the Corporation and financial risks.
(Four information communication failure and the risk management of the Corporation lack
The information collection, transmission, processing, and feedback is important to ensure effective implementation of risk management of the Corporation. Information collected by the relevance of information transmission channels open whether the timeliness and effectiveness of information processing, information feedback effects have a direct impact the effectiveness of risk management activities. Most of our group companies to implement the total sub-structure system, more branch structure set level, the management chain is longer, within the group, multi-link, multi-sectoral information transmission speed is too slow, making the risk management within the group to keep up with the changes of the Corporation, but also increased the overall risk of the Corporation. In addition the majority of our group companies there are still seriously lagging behind the phenomenon of the Group's information system, intra-group information sharing, access to information imputation and analysis tools can not meet the modern enterprise management requirements.
To strengthen the Group's risk management countermeasures and suggestions
Several problems exist in terms of risk management for the group company in China, I believe that the following aspects should be improved:
(One to establish and improve the Group's internal risk system, reduce business risk
Corporation should be based on business size and capacity and development of strategic objectives and establish a sound internal control system to provide adequate and reliable basis for the implementation of risk management to minimize the likelihood of risk for the majority of our group companies, risk management lack of unified management mechanism of the status quo, the company should be clear division of responsibilities and positioning of the risk management departments and professional sectors, from the organization to solve the Corporation does not focus on risk control of the situation. Corporation through the establishment of a professional risk management institutions the implementation of the institutional responsibilities, and give full play to the functions of risk management institutions, and improve operational efficiency, reduce operating costs.
(B establish a centralized financial management system, strengthen financial risk management
Practice has proved that the Corporation's development and expansion of the inevitable requirement for the centralization of financial management, especially the larger group of companies, vulnerable to long management chain, resulting in expansion and capital supply capacity is not commensurate with the members of their own way, the funds for use inefficient group companies only take the centralized management, in order to control the significant risks and protect the Enterprise Strategy Group's corporate headquarters should be unified mobilization, allocation, use and management of funds, to strengthen the awareness of members of the fund management company, and regulate the balance of intra-group funds to strengthen the members of the company's financial monitoring capabilities to reduce the external size of the loan, reducing the Group's financial expenses, so as to control the financial risk, and optimize the capital structure and other purposes. In order to strengthen the Group's risk-based control, the company headquarters to the capital centralized management of the investment focus on content, risk prevention permeate the whole process of business activities, improve the operational efficiency of the funds and assets, and make the planned use of funds, the implementation of the overall budget management and other aspects of work.
(C) to strengthen the Group's information system, to optimize the means and methods of risk management
The Corporation's risk management needs of many management-level information, establish a sound group company management business to adapt information technology control processes and improve information and data input and output efficiency, timely delivery of information, and effectively overcome the human information damage, provide strong support for the entire group risk management, reduce the occurrence of the phenomenon of favoritism. the same time, the company should use the means and methods suitable for the Group to perform the internal risk management, pay attention to correctly handle the risk management points and surfaces the relationship between, and comprehensively improve the Group's risk control capability and management efficiency.
(D build a complete risk assessment system, to improve risk measurement methods
Risk assessment, including goal setting, risk identification, risk analysis and risk response, the company should regularly carry out risk assessments in goal setting, accurate identification and to achieve the control objectives related to internal risks and external risks and determine the appropriate risk withstand in risk identification, the company should strive to a wide range of information, efforts to identify and to achieve the control objectives of the Corporation's internal and external risks, risk analysis, the Corporation shall be in the risk identification based on the likelihood of risk affect the degree of description, analysis, judgment, and to determine the importance of risk level, and then try to use a combination of qualitative and quantitative methods, according to the likelihood of risk and its impact on the risks identified for analysis and sorting to determine the concern of the focus of risk management, risk response, the Group companies to combine their own risk tolerance trade-off between risk and return, to determine the risk response strategies in the use of coping strategies, the company should be combined with risk aversion, risk tolerance risk reduction and risk-sharing strategy, rather than isolating a particular strategy. other group companies should also times to improve risk measurement and assessment methods, risk measurement and assessment methods, the company can be a combination of objective law of probability, subjective probability method, regression analysis and other methods, in order to obtain more accurate risk measurement.
(E) the establishment of a sound long-term and short-term combination of financial early warning and analysis systems, and improve the Group's risk control capability
Group companies according to their own situation, headquarters and subsidiaries of the Corporation to develop differences in the risk evaluation index, and strive to establish a sound long-term and short-term combination of financial early warning analysis system solvency, operational capacity of these indicators should include at least indicators of profitability, ability to develop and build on this basis, the financial risk early warning model to prevent and control financial risks. financial early warning can be used univariate analysis can also be used multivariate analysis model, the Corporation and under the sub- the company's production and operation process of tracking, monitoring, early detection of signs of the Group's financial crisis. In addition, the company not only to establish short-term financial early warning system, strengthening the early warning of short-term financial risks, but also to establish long-term financial early warning system, so be prepared for danger in times of peace . V.
Group, the company's development is an important guarantee to improve the level of the national economy, enhance the effective strength of the country's competitiveness. Overall, the majority of our Group's risk management has lagged far behind the pace of development of the Group, the control of the risk of the Corporation lack of a complete set of theoretical and practical system for group companies to manage risk and its prevention issues will be a persistence of the subject but changing needs of our contemporary accounting personnel from the two aspects of the theory and practice constantly explore Share in the free paper download center http://eng.hi138.com