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  • Riskology by Infortal: Episode 36 - Geopolitical Risk Management for CFOs

    Riskology by Infortal: Episode 36 - Geopolitical Risk Management for CFOs
    2024/11/11
    The Evolving Role of CFOs in Geopolitical Risk Management CFOs, it's time to rethink how you approach global risk! Geopolitics isn't just for diplomats - it's seeping into the boardroom and impacting bottom lines, now more than ever. Join Riskology by Infortal™ hosts Dr. Ian Oxnevad and Christopher Mason from Infortal Worldwide as they highlight the strategic importance of factoring in Geopolitical Risk analysis into CFO-led strategic planning and financial forecasting. Geopolitical Risk & Chief Financial Officers (CFOs) In the complex landscape of global business, geopolitical risks hold significant sway over corporate strategy, whether planned or not. Geopolitical risks encompass a wide range of factors, from inflation and economic policies to socio-political dynamics, all of which can disrupt market stability. Traditionally, the evaluation and management of these risks may not have fallen directly within the purview of CFOs. However, as companies increasingly navigate volatile environments, CFOs find themselves uniquely positioned to incorporate geopolitical risk assessments into financial strategies to ensure longer-term sustainability. CFOs are integral to a firm's financial health and resilience. As global markets become more interconnected and unpredictable, CFOs must now factor in geopolitical variables that could significantly impact an organization’s operational continuity. Just think about the recent impact that economic warfare, i.e. sanctions, has had on the shipping industry. Understanding these dynamics is essential for fostering robust financial planning and risk management. The Impact of Geopolitical Risks on Financial Planning Geopolitical instability can have far-reaching impacts on various financial aspects of a business, making it critical for CFOs to stay informed and proactive. The key to thriving amidst these uncertainties lies in strategic preparedness and robust scenario planning. Scenario planning involves envisioning multiple future states and their potential impacts on the business. By simulating different geopolitical scenarios, CFOs can proactively devise contingency measures to mitigate risks. For instance, understanding how a new trade embargo might affect supply chains allows financial leaders to identify cost-effective alternative suppliers or logistical routes, thereby minimizing disruption and preserving continuity in the event of a significant geopolitical shift. This financial foresight also aids in maintaining compliance with international laws and regulations, safeguarding the firm from legal repercussions. Leveraging Technology for Risk Monitoring The evolution of technology has dramatically enhanced the capacity to monitor and mitigate geopolitical risks. Advanced risk dashboards and sophisticated risk management tools now offer unprecedented capabilities in risk detection and analysis. Risk management systems can categorize risks, assign scores, and generate predictive analytics, giving CFOs actionable insights. This continuous monitoring is crucial, as it allows for timely adjustments to financial plans, ensuring that resources are allocated efficiently, and emergency funds are available when crisis strikes. Importantly, you also need to make sure that you are looking beyond the tech solutions to make sure that you have a boots-on-the-ground understanding of the risk landscape. This may require periodic reviews or conducting more in-depth due diligence. Read full show notes at Infortal Worldwide Resources: Infortal Worldwide Email Dr. Ian Oxnevad on LinkedIn Chris Mason on LinkedIn
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    13 分
  • Riskology by Infortal: Episode 35 - Riskology in London with BABL AI

    Riskology by Infortal: Episode 35 - Riskology in London with BABL AI
    2024/10/28
    Riskology by Infortal™ is coming to you this week from the GRC Risk Conference in London. Join host, Ian Oxnevad, as he discusses the intersection of AI and Risk with the CEO of BABL AI, Shea Brown. Their discussion covers several dynamics of AI development and implementation in the context of the growing global risk landscape and the challenges posed by autonomous decision making. Risk Management & AI AI introduces new dimensions of risk to the ever-changing risk management landscape by extending the reach of malicious actors. Fortunately, as Shea Brown points out, defenders against attacks can also benefit from AI. In fact, companies are increasingly integrating AI into their risk management strategies, which reflects a broader trend towards digital transformation across industries. AI-based risks, however, are complicated by the fact that there are an increasing number of use cases for new AI technology. For example, there are new vulnerabilities in the fields of autonomous vehicles, facial recognition, and resource distribution. Companies can no longer ignore the building AI revolution. To prevent disaster, companies must carefully review their risk exposure to outside actors using AI and from challenges created by using the technology in house. During and soon after implementing AI solutions, it is important to gain a deep understanding of how the new technology will impact existing systems and processes. AI-audits provide a great mechanism to ensure that any new tech is up the requisite standards and increases transparency to relevant stakeholders. Buyer Beware The market is becoming saturated with seemingly revolutionary solutions in the risk management space. However, increased investment in this space does attract bad actors offering subpar or worse, even fraudulent solutions. This makes it important to know who is behind the companies you are considering buying from or partnering with. Conducting deep level due diligence on the companies and partners you plan to do business with in the AI space is important to make sure you are onboarding enhancements and not detractors from your bottom line. AI and the Human Element In the world of AI development, an often-overlooked element for successful AI implementation is the need for human-centric oversight. Human supervisors can catch mistakes that automated systems overlook, providing a needed layer of security and reliability. This is especially important in high-risk areas where AI decisions have social and individual impact. By integrating a human-in-the-loop approach, organizations can better align their AI systems with ethical standards and a human focus. Mitigating Risks While integrating AI-based technology into existing programs can pose certain risks for firms, the benefits can be significant. The key is making sure you know what you are getting and that any new technology will live up to your firm’s values. Importantly, AI does not eliminate the importance of accounting for human behavior. Currently individuals are still driving decision making and controlling the use of AI technology. Conducting due diligence on potential suppliers and performing audits on the AI impact to your company will place you ahead of the curve in terms of benefiting from the AI advancements now available in the risk management space. Resources: Infortal Worldwide Email Dr. Ian Oxnevad on LinkedIn Shea Brown on LinkedIn
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    13 分
  • Riskology by Infortal: Episode 34 - The Hezbollah Pager Attack & Supply Chain Compliance

    Riskology by Infortal: Episode 34 - The Hezbollah Pager Attack & Supply Chain Compliance
    2024/10/14
    Tune in for the latest episode of Riskology by Infortal™, where special guest Tom Fox of the Compliance Podcast Network and hosts Dr. Ian Oxnevad and Chris Mason dive into the business and compliance implications of Israel’s counterterrorism operation involving Hezbollah’s electronic devices. Hezbollah’s Supply Chain Failure and Israel’s Counterterrorism Success Israel’s counterterrorism operation in Lebanon on Hezbollah’s electronic devices serves as a stark reminder of the compliance risks that global businesses face. Even though Hezbollah is a terrorist group, the pager operation provides lessons for normal businesses. In this particular case, a Taiwanese company called Gold Apollo licensed its name to a Hungarian company, which then manufactured and sold pagers to Hezbollah. This relationship, initially straightforward, became complex as the Hungarian company sought to evolve and use the Taiwanese company's name to make its own proprietary designs. Ultimately, these pagers found their way into the hands of Hezbollah members. This case raises several compliance concerns. The lack of thorough due diligence by the Taiwanese company allowed for potential misuse of their products. The complexities of tracking ownership and responsibility in global supply chains mean that even legitimate companies can become inadvertently involved in geopolitical conflicts. This event underscores the necessity for robust compliance frameworks to prevent such issues. Supply Chain Vulnerabilities and Advanced Technology The use of pagers to coordinate an attack highlights vulnerabilities within supply chains, especially when advanced technology is involved. It was speculated that a Hungarian company acted as a front for Mossad or other intelligence agencies. This kind of covert operation not only increases the complexity of supply chains but also the risk profile for all companies involved. Additionally, payments originating from unnamed Middle Eastern countries were flagged by banks in Taiwan, highlighting another layer of failure. These offshore payments triggered additional scrutiny and delays, emphasizing the importance of financial transparency and thorough documentation in global transactions. While initially flagged, the transactions were ultimately serviced. Reputational and Operational Risk Implications All organizations use electronics tied to complex, cross-border supply chains. Understanding the makeup and oversight of the underlying supply chain should be an important consideration for selecting vendors. Large corporations, small non-profits and even government bureaucracies can be indirectly exposed to significant reputational and operational risk if supply chains are not managed correctly, as the pager attack scenario illustrates. At the end of the day, it pays to know who you do business with, and this requires up front due diligence. Resources Infortal Worldwide Email Chris Mason on LinkedIn Dr. Ian Oxnevad on LinkedIn Tom Fox on the Web | LinkedIn
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    22 分
  • Riskology by Infortal: Episode 33 - Corporate Intelligence: Myth Vs. Reality

    Riskology by Infortal: Episode 33 - Corporate Intelligence: Myth Vs. Reality
    2024/09/23
    Join hosts Christopher Mason and Dr. Ian Oxnevad as they discuss how companies can harness the power of intelligence to avoid crises and seek out new opportunities. How can Companies Use Intelligence? While intelligence is critical for crisis management, its benefits extend far beyond that. Companies increasingly recognize the long-term advantages of integrating intelligence into their strategic planning. This involves not just avoiding immediate risks but also identifying long-term opportunities. Business intelligence isn't just about collecting data; it’s about leveraging the correct information to make informed decisions. Breaking Down the Misconceptions Many executives instantly think of spy movies or corporate espionage when they hear "intelligence." This misconception can prevent companies from enjoying the benefits of a developed intelligence collection and analysis program. For example, a company might use intelligence to identify potential supply chain disruptions, allowing them to take corrective actions in advance. Similarly, understanding the political landscape can help businesses anticipate changes that might affect their operations or investments. Trust but Verify Approach The principle of "trust but verify" becomes paramount when making substantial strategic decisions. Business intelligence is the verifying mechanism, ensuring trust is well-placed and minimizing risks. Deploying intelligence investigations and integrating insights into decision-making allows companies to navigate complex market conditions with greater confidence and security. This practice helps avoid immediate pitfalls to establish long-term, resilient business strategies. Assess Your Risk Profile and Decision-making Processes Before integrating intelligence functions, companies need to understand their risk profile and decision-making processes. This involves conducting a risk assessment of your firm to establish a baseline to improve on. Then, you must examine your company’s decision-making processes to determine how best to integrate valuable intelligence into your operations. You can navigate risk more effectively by embedding intelligence functions within your operations, providing a competitive advantage. For full show notes, go to Infortal Worldwide. Resources Infortal Worldwide Email Chris Mason on LinkedIn Dr. Ian Oxnevad on LinkedIn
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    16 分
  • Riskology by Infortal: Episode 32 - Seeing Red: Supply Chain Crisis

    Riskology by Infortal: Episode 32 - Seeing Red: Supply Chain Crisis
    2024/09/09
    In the latest episode of Riskology by Infortal™, hosts Christopher Mason and Dr. Ian Oxnevad discuss the ongoing crisis impacting shipping through the Red Sea. Geopolitical Risks in Global Shipping Geopolitical risks have consistently shaped global commerce, significantly impacting the shipping industry. Elections and ongoing conflicts have exacerbated an already volatile environment, impacting both national and international supply chain operations. This summer, multiple crises have underlined the magnitude of these risks, with a major focus shifting to the situation in the Middle East. The Middle East Conflict: A Catalyst for Economic Disruption One of the most recent supply chain disruptions stems from the conflict involving the Houthis in Yemen. This Shiite group, backed by Iran, has increasingly targeted shipping routes through the Red Sea, causing substantial disruptions. Such attacks have not only heightened regional instability but have also resulted in skyrocketing insurance costs for vessels. For instance, war premiums on shipping vessels passing through the region have doubled, indicating the heightened risk and operational costs faced by shipping companies. Some carriers will no longer offer coverage. These disruptions contribute to a broader economic impact beyond the shipping industry. The Broader Implications of the Houthis' Actions The Houthis' disruption of Red Sea shipping routes has led to a cascade of economic challenges. Vital routes, such as the Suez Canal, have experienced a significant reduction in trade volume, which in turn has severely impacted regional revenue generated from the canal. Alternative shipping routes, like those around the Cape of Good Hope, have become necessary, leading to increased travel distances and fuel costs. These developments delay shipments and increase the environmental costs associated with the extended routes. Such disruptions have led to systemic issues, such as the bankruptcy of ports close to affected regions. The Port of Eilat in Israel experienced such a fate in July, largely due to decreased shipping activities. These logistic challenges echo far beyond mere financial losses, influencing global shipping patterns and affecting international trade and economic stability. Conclusion Addressing the ongoing geopolitical situation in the Middle East, especially involving the Houthis, is crucial for stabilizing global shipping routes and mitigating the economic backlash. With the ripple effects already apparent in various sectors, a keen understanding and proactive approach towards these challenges could fortify global trade resilience, ultimately benefiting businesses and consumers alike. Companies must assess their long-term strategies and consider alternative markets and shipping practices to navigate this volatile landscape. The ongoing vulnerability in traditional shipping routes requires agile and innovative solutions, particularly as the market faces new pressures ahead of winter months. To avoid the impact of the crisis, you must closely examine your risk exposure and explore alternative supply chain options as needed. Resources Infortal Worldwide Email Chris Mason on LinkedIn Dr. Ian Oxnevad on LinkedIn
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    17 分
  • Riskology by Infortal: Episode 31 - Nigeria: Turning the Tide Against Corruption with Soji Apampa, Christopher Mason and Dr. Ian Oxnevad

    Riskology by Infortal: Episode 31 - Nigeria: Turning the Tide Against Corruption with Soji Apampa, Christopher Mason and Dr. Ian Oxnevad
    2024/08/26
    In Episode 31 of Riskology by Infortal, join Soji Apampa, Christopher Mason, and Dr. Ian Oxnevad as they discuss Nigeria’s fight against corruption in the post-Covid era. Soji, Chris, and Ian discuss the grassroots and civil society efforts in Nigeria and West Africa to combat corruption and increase business transparency. The Fight Against Corruption and the Role of Civil Society Soji Apampa, a leader in the anti-corruption space, shares his experiences in promoting ethical business practices in Nigeria and the evolution of corporate compliance in the region. Contrary to top-down regulatory regimes in the US and Europe, anti-corruption efforts in Nigeria underscore the need for effective collective action from the private sector and civil society. Culture Matters: From a Perception of Anti-Government to Anti-Corruption Soji’s journey in integrity and anti-corruption began when he returned to Nigeria as a civil and structural engineer. Frustrated by the rampant corruption and trade malpractices, he took it upon himself to help instill a culture of transparency and anti-corruption. Over time, these efforts shifted the culture where “anti-corruption” was deemed to be “anti-government” to a culture of increased transparency and professionalism. Despite initial setbacks, the support from like-minded individuals and organizations paved the way for significant progress. Culture Matters: Regulations in the West Don’t Work the Same Way Elsewhere Initially, practices such as bribery were not only common but also tax-deductible in countries like France and Germany. Countries like the US, UK, and France have even historically topped indices for bribery, despite stringent anti-corruption laws. A critical factor in the success of compliance programs is the cultural context within which they operate. Corporate culture often reflects broader societal norms, impacting how compliance policies are perceived and implemented. When Going Abroad, You Need a Guide Understanding local dynamics is crucial as even the best compliance plans can falter if they don’t align with ground realities. Unlike the abstract nature of high finance, industries such as shipping depend heavily on functional relationships between shippers, locals, and governance. This sector demonstrates that proper collaboration ensures essential goods move smoothly, maintaining daily life. As bottom-up initiatives help combat corruption, greater diversity in the business environment will become more localized. At the same time, avoiding violating laws like the Foreign Corrupt Practices Act (FCPA) initiatives and local laws requires having a “local guide” help you navigate new business environments. Intelligence and local connection matters. Nigeria’s Success Now a Model For the “Global South” The Nigerian model of tackling maritime corruption has inspired similar reforms in other key global ports and regions. Nations such as Egypt, India, Pakistan, Bangladesh, and Ghana have begun adopting similar frameworks, showing promise for broader anti-corruption efforts. Countries like Nigeria, which show real structural changes, may not immediately reflect these in perception surveys, yet they offer untapped potential for investors aware of these developments. This forward-looking approach, integrating both retrospective analysis and future opportunities, aims to not only continue the fight against corruption but to set an example that ripples out to other industries and regions trying to roll back corruption. Resources Infortal Worldwide Email Chris Mason on LinkedIn Dr. Ian Oxnevad on LinkedIn Soji Apampa on LinkedIn
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    25 分
  • Riskology by Infortal: Episode 30 - Boeing’s Future: Failure is Not an Option with Tom Fox and Christopher Mason

    Riskology by Infortal: Episode 30 - Boeing’s Future: Failure is Not an Option with Tom Fox and Christopher Mason
    2024/08/12
    In Episode 30 of Riskology by Infortal, join Tom Fox and Christopher Mason as they explore solutions to Boeing’s compliance challenges. Tom and Chris discuss the economic and national security implications of Boeing’s position as the primary commercial airplane manufacturer in the U.S. and its critical role in global commerce. The Stakes: Too Big to Fail -Or- Something Different Altogether? The notion of a company being “too big to fail” often conjures images of government bailouts and economic upheaval. However, in Boeing’s case, this isn’t merely about financial assistance. Boeing’s potential failure would have far-reaching implications, affecting millions of Americans who rely on its products either directly or indirectly. This includes everyone, from domestic travelers to government agencies reliant on Boeing for day-to-day operations. One Possible Solution: An Omnibus Monitorship Tom Fox introduced the concept of an omnibus monitorship as a multi-tiered, all-encompassing approach to addressing Boeing’s multifaceted compliance issues. Rather than hiring one firm to correct specific compliance programs, this proposed model features multiple subject-matter monitors focusing on areas such as culture, ethics, compliance, health and safety, quality assurance, internal controls, fraud prevention, and export controls. This comprehensive approach is critical for restoring trust and achieving long-term stability and ethical conduct within the company. The Cultural Imperative Rebooting Boeing’s culture is vital to ensuring a vibrant future. Transparency and accountability are fundamental to this transformation. Implementing the proposed omnibus monitorship would not only entail a significant financial investment but would also demand a structural and cultural overhaul. The long-term benefits for society and the global economy make this an essential endeavor. European and Global Reactions Interestingly, the European market, particularly Airbus, has maintained a relatively quiet stance amidst Boeing’s controversies. Despite their silence, Airbus stands as the primary beneficiary of Boeing’s issues. With Boeing embroiled in cultural and compliance challenges, Airbus has seen increased interest without needing to make any aggressive moves. This passive advantage could potentially lock in years of sales for Airbus, positioning them as the dominant player if Boeing doesn’t address its internal issues promptly. Omnibus Monitorship and Productivity Implementing the omnibus monitorship and addressing regulatory concerns will undoubtedly impose additional pressure on Boeing. This expanded oversight aims to foster transparency and robust compliance, yet it could potentially slow down productivity. For Boeing to navigate this complex landscape, balancing improved compliance and maintaining output efficiency is vital and important for the US economy. Conclusion: A Call for Transformation The situation surrounding Boeing is a poignant reminder of the importance of robust corporate compliance and ethical culture. Chris and Tom underline in today’s discussion that getting it right for Boeing involves a comprehensive, transparent approach that goes beyond merely correcting policies. This isn’t just a compliance issue; it’s a cultural and ethical imperative that impacts millions of lives and touches numerous facets of both national and international commerce and security. We hope you join Tom Fox and Chris Mason as they unravel the complexities surrounding Boeing, its cultural overhaul, and a proposed omnibus monitorship aimed at fostering long-term compliance and ethical conduct. Resources: Infortal Worldwide Email Chris Mason on LinkedIn Tom Fox on the Web | LinkedIn
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    17 分
  • Riskology by Infortal Episode 29: Election Risk: Managing Ballot Box Uncertainty

    Riskology by Infortal Episode 29: Election Risk: Managing Ballot Box Uncertainty
    2024/07/22
    Welcome to Episode 29 of Riskology by Infortal.™ With over half of the world heading to the polls in 2024, the stakes are high and there is a lot for companies to consider. The 2024 election cycle has certainly lived up to the hype so far, and its impact cannot be underestimated. Join hosts Dr. Ian Oxnevad and Christopher Mason as they break down recent electoral developments. Analyzing Recent Political Shifts in the UK and France In a move that surprised many political analysts, Rishi Sunak, the UK's Prime Minister, called for a snap election amidst significant political upheaval. The subsequent victory of the Labour Party marked a significant shift in the political landscape that had been dominated by the Conservative Party for the past 14 years. France's political climate has been particularly volatile, with the emergence of right-wing movements challenging the status quo. France also recently encountered a snap election. The recent political maneuvers in France have demonstrated how political sentiment can rapidly divide governments and significantly influence future policy formulations. The political volatility in Europe, particularly in France and the UK, is increasingly reflected in market movements. This underscores the importance for companies with international operations to develop robust strategies to manage these risks. The ability to call for snap elections, a concept foreign to the American election cycle, underscores how quickly political norms can change in Europe. This highlights the crucial need for companies to stay vigilant and understand how shifts can impact their operations, emphasizing the importance of proactive planning. Managing Election Risk From a global risk perspective, companies must integrate multifaceted political risk analysis into their strategic outlook to stay ahead of shifting policies and the impact to business operations. Companies need to proactively create contingency plans to navigate political change. This involves not just assessing immediate risks but also understanding the long-term implications of political shifts. The Importance of Contingency Plans Having a well-prepared contingency plan can provide a significant advantage, especially during tumultuous times. The COVID-19 pandemic has underscored the need for such preparedness, revealing vulnerabilities in logistics and supply chains. Companies that anticipate potential political shifts and have contingencies in place will be better positioned to handle the election impact on markets and regulatory frameworks. Executives must stay informed about political trends to remain agile enough to adapt quickly. To remain competitive, this involves focusing on compliance and anticipating the direction of policy changes. Organizations must integrate political risk assessments into their broader strategic frameworks to remain resilient. As hosts Dr. Ian Oxnevad and Christopher Mason discuss in this episode, investing in political risk intelligence can provide a significant advantage for your firm. We hope you can join us for Episode 29 of Riskology by Infortal!™ Resources Infortal Worldwide Email Dr. Ian Oxnevad on LinkedIn Chris Mason on LinkedIn
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    15 分