Study Shows Level of Disclosed Risks Does Not Predict Business Performance
A study by the CGA-Canada Accounting and Governance Research Centre (CGA-AGRC) at the University of Ottawa examined the relationship between risk disclosure and business performance, and found that the level of disclosed risks does not appear to predict the company’s business performance. The study, Enterprise Risk Management and Business Performance during the Financial and Economic Crises, was published in Problems and Perspectives in Management.
Regulations require companies to disclose important trends and risks that have affected, or may in future affect, their financial statements. While major changes in business performance occurred during the financial crisis and economic recession of 2008 and 2009, company annual reports published in 2007 and 2008 identified only minor increases in disclosed risk exposure, risk consequences and risk management strategies. Moreover, the timing of changes in financial market, operational and accounting performance differed significantly. While the financial crisis had an immediate effect on measures reflecting the market value of equity, it had more of a delayed effect on sales and earnings before interest and taxes (EBIT) margins.
“Enterprise risk management (ERM) still has value,” says Daniel Zéghal, FCGA, Executive Director of the CGA-AGRC and a co-author of the study. “In fact, the findings may be pointing to the inefficiency of risk communication strategies rather than limitations of ERM programs. Firms that engage in ERM should be able to better understand the aggregate risk inherent in different business activities.”
Certain deficiencies in collecting and providing quality ERM information were identified in a previous study, which found that the 2008 financial crisis led to only modest changes in risk management disclosure at non-financial Canadian companies.
Zéghal adds that research on the relationship between company performance and disclosure of ERM information is still in its infancy. “More studies, using a much larger sample and a longer timeframe, as well as improved analytical tools, will help provide a clearer picture of the relationship between ERM and business performance.”
About CGA-Canada
Founded in 1908, the Certified General Accountants Association of Canada [This link is no longer available] serves 75,000 Certified General Accountants and students in Canada and nearly 100 countries. Respected accounting and financial management professionals, CGAs work in industry, finance, government and public practice. CGA-Canada establishes the designation’s certification requirements and professional standards, offers professional development, conducts research and advocacy, and represents CGAs nationally and internationally. www.cga.org/canada
Read more in CGA Magazine.
Professor Doug Angus Provided Expertise on Medical Resident Work Hours
Professor Doug Angus of the Telfer School served as a member of one of the expert working groups which studied the issue of resident duty hours for the Royal College of Physicians and Surgeons of Canada. This initiative culminated in a final report released in June 2013: "Fatigue, Risk and Excellence: Towards a Pan-Canadian Consensus on Resident Duty Hours".
Doug Angus is a Full Professor in the Telfer School of Management with expertise in health economics and health policy. He has research activities at the international, national, provincial and regional levels in areas related to health economics, health policy, program evaluation and health care management.
SSHRC Grant Awarded for Research on the Challenges and Best Practices Involved in Mentoring a Diverse Workforce
Dr. Joanne Leck and Dr. Catherine Elliott were awarded a $24,552 grant from the Social Sciences and Humanities Research Council (SSHRC) to report on the challenges and the emerging best practices involved in mentoring a diverse workforce.
Mentoring is a proven organizational strategy to develop leadership skills, yet members of designated groups including immigrants, women, visible minorities, aboriginal persons, and disabled persons face challenges in the mentoring process that limit their ability to acquire these skills. These groups remain underrepresented in upper management and in positions of power at a time when competition for knowledge workers and the shortage of leadership talent is putting pressure on Canadian organizations to invest in the training and professional development of their staff.
The research supports the goal of improving mentoring effectiveness, which will permit underrepresented groups to participate more fully in the Canada workplace, especially in leadership roles.
Professor David Wright in the Latest Issue of Research Perspectives
The new issue of Research Perspectives published by the University of Ottawa is focused on energy. Among the experts interviewed: Professor David Wright of the Telfer School, who developed an algorithm that can significantly reduce the costs and greenhouse gas emissions of computer network activities.
The full article is available online [This link is no longer available].
Gurprit Kindra Will Examine the Consumption Patterns of ‘Bottom-of-Pyramid’ Consumers in India
Professor Gurprit Kindra will use a new research grant to examine the consumption patterns and behaviours of consumers at the “Bottom-of-the-Pyramid” (BOP) in India. There have been numerous calls for studies that reflect the perspectives of poor consumers located at the low end of the market in emerging economies but very little research has been undertaken to date. Improved knowledge of India’s BOP consumers will assist Canadian and Indian business to better serve this large, emerging segment of the market.
The work was awarded a $6,000 grant from the University of Ottawa’s Research Development Program and an equivalent amount in matching funds from the School of Management Research Fund.
- David Wright, with uOttawa Colleagues, Will Investigate ROI of Next-Generation Solar Cell Technologies
- Muriel Mignerat Awarded Best Paper Award for Study on the Use of Telecare for Diabetic Patients
- Brian Conheady was awarded 2nd Place in the Howard Teall Innovation in Accounting Education Award Competition
- Study of Clinical Handover Processes for Cardiology Patients receives funding from CBAP
