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Strong, Board-to-Trader risk governance is foundational to the long-term viability of organizations that participate in highly-volatile energy markets.
Historical cases of unacceptable, entity-threatening losses to energy market participants are nearly always a function of weakness in risk governance ranging from a trader-exploited loophole to lack of sound, cascading delegations of authority (DOA) to ineffective or untimely exposure reporting.
Their risk governance frameworks to provide confidence at all levels of the organization that the business strategy can be vigorously pursued absent fear that an unexpected, negative “surprise” is gestating unseen within the organization.
Develop or evaluate and enhance corporate risk policies for clarity of objectives, articulation of governing tolerances and aggregate exposure limits, alignment with operating model, and linkage with risk procedure documentation (including trading, operational, EH&S, and enterprise risk management)
Develop or evaluate and enhance cascading Delegations of Authority (DOA) from Board through front office, role definitions and their specific authorizations, separation of duties (SOD), and activity validations (e.g., trade confirms) where appropriate
Evaluate and enhance risk controls efficacy through stress-testing and walkthroughs to identify gaps/loopholes in validation and escalation procedures and systems configurations; document recommendations and/or develop gap-closing measures
Develop or evaluate and enhance corporate risk policies for clarity of objectives, articulation of governing tolerances and aggregate exposure limits, alignment with operating model, and linkage with risk procedure documentation (including trading, operational, EH&S, and enterprise risk management)
Develop or evaluate and enhance cascading Delegations of Authority (DOA) from Board through front office, role definitions and their specific authorizations, separation of duties (SOD), and activity validations (e.g., trade confirms) where appropriate
Evaluate and enhance risk controls efficacy through stress-testing and walkthroughs to identify gaps/loopholes in validation and escalation procedures and systems configurations; document recommendations and/or develop gap-closing measures
