http://business.timesonline.co.uk/tol/business/related_reports/business_solutions/article5792397.ece

Hi, a quick update:
Firstly, a story on the growing importance of Game Theory in business. We will be addressing some of these issues and how companies can utilise Game Theory in later blogs but at LINKS we find it interesting that this subject is growing in coverage. Game Theory has been utilised for hundreds of years, and was popularised by the Nobel prize winning John Nash. When fully understood and appropriately used, it is an extremely powerful business tool.

Secondly, there was an article in the Times on Monday suggesting that risk managers aren't listened to (1 in 8). Firstly, if 7 in 8 are listened to, that's not a bad strike rate. It is possible that the 1 in 8 who aren't listened to are overly conservative. Some risk managers in the past have employed tactics along the lines of, "if you don't play you can't lose". However, this isn't conducive to good business. Any corporate is in the business of taking risk. What sets them apart from their competition is getting more buck for the risks that they do take as well as how they manage risks when they go wrong. If risk managers aren't supporting this ethos they will rapidly lose influence in their institution.

For example, if business was done despite a risk manager suggesting it shouldn't be, and this business then proceeded to make money, that risk manager will be less likely to be listened to second time round, even if the risks taken for the money made weren't appropriate.

Risk management in Corporations needs to focus on devising clever hedging strategies which support their business models and ensuring their institutions are taking appropriate risk. A risk manager's most important job is to help his CEO understand as much as possible about the economic landscape and all the possible pitfalls which may await. The fully informed CEO is then able to try to maximise his companies PnL, with risks either planned for or hedged.

Happy hunting,
Andy

LINKS Risk Advisory has now officially launched and is servicing clients with bespoke risk solutions. And what a time to launch !

The economy is not just being turned upon its head but is being shaken vigorously, up, down and from side to side. Many firms have been caught out with the speed and nature of the downturn and are struggling to realign their resources to fit their rapidly changing business environment. Politicians are gambling on Keynes inspired measures to stimulate the economy while praying to the ghosts of economists past that these measures will actually work and won't result in them making a bad situation worse. There are also many commentators jumping on the bandwagon and describing the challenges as - 'unprecedented' and - 'the worst conditions for over 100 years'. Reputations are being made, but mostly lost.

Over the coming months, LINKS is going to address a number of issues that any discerning business needs to tackle in order to come through the current challenges in good shape. Careful and informed risk management decisions taken over the next two years will still be felt ten years from now. Getting these decisions right is critical to ensure you can present your company in rude health at the start of the next upturn.

We will be addressing topics like 'Game Theory' and 'Chaos Theory' and explaining why theories like these will be shaping the future of economic research. We also intend to give discerning business leaders a chance to get a head start in using these theories to help drive their profits.

This may seem an odd thing to say, but the current state of the economy is presenting to corporate and financial institutions alike one of the greatest opportunities we've seen in decades. Those that are thoughtful in how they restructure, anticipate changes in the market ahead of others, and shrewdly hedge their business strategy, will give themselves the best opportunity to leave their competition at the starting blocks. Many won't even make it out of the blocks. If you know where to look, the clues are already out there as to how a business should restructure itself and how the economy is going to look in the coming years
. The corporations who will be successful will be those that take brave, informed decisions over the coming year that springboard their businesses into the post crunch economy. We hope that you will be one of them !

Happy hunting,
Andy Shaw

Welcome to Links Risk Advisory's Site Launch!

Thank you for visiting Links Risk Advisory! Check back to this section very soon. We will be posting commentary on current risk and financial issues on a regular basis in this section of the site.

Thanks,

Links Risk Advisory