Risk management after an IPO
Seven risk management musts
While most organizations perform the basic elements of risk management, the top performers do more.
| 1 | Lead with the tone at the top |
| | The organization must communicate clear risk management policies and procedures. An effective risk management framework starts at the very top of the organization and enables the business to approach the future with confidence. |
| 2 | Have robust corporate governance |
| | This is essential for all newly listed businesses in their time of great change. The organization must have a strong risk management and internal control environment. Investors are paying much closer attention to how companies approach compliance and corporate governance. |
| 3 | Do not surprise the market |
| | The market reacts negatively to surprises. Even positive ones can suggest to investors that the board’s control over the business is not what it should be. An effective risk management program can help reduce the risk of surprises. |
| 4 | Set realistic financial targets |
| | A newly listed business needs to set and meet expectations on financial performance if it is going to accelerate its growth. Goals must be realistic, clearly communicated and tied to risk management. |
| 5 | Stay ahead of changing regulations |
| | A newly listed business has to comply with a host of new regulations, legislation and filing deadlines. A key component of an improved risk management program is better corporate and regulatory compliance. |
| 6 | Consider risk at the beginning |
| | Risk should be considered during the strategic decision-making process at the end. An early understanding of planning and resource risks enables a better focus on business investments. Companies that consider the likely response of competitors and the potential for third-party risks are better able to identify opportunities for competitive advantage. |
| 7 | Identify emerging risk issues |
| | Strategic uncertainties arise from emerging risks that have the power to threaten the current business model. The business needs to consider emerging risk throughout its value chain, including suppliers, customers, partners and key stakeholders. |
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- Global IPO activity rose in Q2
Even without Facebook’s IPO, which made up 38% of capital raised in Q2, overall global IPO activity in Q2 was 49% higher than Q1.
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