Cost of Debt Analysis

The finance department records operating activities, tracks changes in business conditions and predicts operating indicators, prepares financial statements that inform top management, regulators and investors about a company's economic health. Finance employees also ensure that internal mechanisms and policies comply with regulatory standards, industry practices and human resources policies.

Balanced Risk Management Diagnostic

Chairmont's unique approach to Balanced Risk Management (BRM) enables us to work closely with our clients to identify, analyse, evaluate and manage the most critical areas of risk associated with their organisations.

According to the International Organisation for Standardisation's publication ISO 31000:2009 and the Australia/New Zealand standard for risk management, AS/NZS 4360:2004, the term "risk" is defined as "...the possibility of something happening that impacts on your objectives. It is the chance to either make a gain or a loss. It is measured in terms of likelihood and consequence."

In summary, risk is the likelihood of an event occurring and having an impact on an organisation's overall success. The types of events that may occur and have an impact on an organisation are numerous and they change as the business changes. The impact on an organisation from an event occurring may be of an economic, legal, reputational and/or other nature, and as indicated in the definition of risk above, it may be of a favourable or unfavourable nature.

Whilst many organisations manage the risks associated with their business at one level or another and to some extent, an organisation's risk management practices may not be developed and/or implemented fully, or to their optimum level. Chairmont's unique approach to Balanced Risk Management (BRM) enables us to work closely with our clients to identify, analyse, evaluate and manage the most critical areas of risk associated with their organisations.

Our BRM diagnostic has been developed to apply to organisations across any industry, e.g. education, health, financial services, technology, telecommunications, etc.

Click here to read about our BRM diagnostic. A financial services industry example is used.

Budgeting Planning Diagnostic

Chairmont has identified that over time an organisation’s planning and reporting framework can become suboptimal and ineffective as certain risks undermine the process, leading to incorrect risk/return scenarios being considered This can result in poorly informed decision making that produce value destroying outcomes placing future stakeholder / shareholder value at risk. In response Chairmont has developed a budgeting and planning diagnostic tool that provides an organisation with a focused health check on the performance of their existing planning and reporting framework.

The diagnostic addresses the effectiveness of three key planning drivers - governance, people and culture and process and structure. The “state of health” of an organisation’s budget and planning framework is determined against these three drivers through testing it for 16 discrete risk types. Rectification is enabled through a detailed scope and implementation plan that returns an organisation’s planning framework to its appropriate health, or optimal effectiveness, level commensurate with its stakeholder/shareholder value objectives

Capital Management Diagnostic

Economic Capital methodologies, disciplines and governance have been improved through becoming more targeted at the rate of return requirements of the owners and how this translates through to the business decisions and operations.

Our significant experience in the financial services sector has allowed us to draw on the lessons in that industry and apply them in creating this diagnostic.

Over the past ten years there has been a convergence of Regulatory Capital and Economic Capital, which has been most notable in the banking industry. This has had implications for the development of capital management frameworks in organisations. Economic Capital methodologies, disciplines and governance have been improved through becoming more targeted at the rate of return requirements of the owners and how this translates through to the business decisions and operations.

Chairmont's Capital Management diagnostic provides an overview of a capital management framework that is applicable for any industry, e.g. Banking, Insurance, Energy, Telecommunications, Infrastructure, Utilities and Mining. These industries are already regulated to some degree or are becoming more regulated. This highlights the importance of both understanding the similarities in terms of methodologies of Regulatory and Economic Capital whilst appreciating the differences of their respective roles and purpose.

The diagnostic focuses on the practical application of capital management through "In Use" Economic Capital frameworks that drive commercial decisions and planning in organisations. The diagnostic complements our Balanced Risk Management, Alternative Risk Management, Budgeting and Planning and Structural Path Equation Modelling diagnostics.