Corporate Risk Management Framework
GCC edible oil manufacturer
The company manufactures edible oils and distributes across the Middle East and beyond, serving government, wholesale, retail and business segments with both its own brands and private labels. It had posted double-digit growth in consecutive years and needed a risk framework to match the scale of the business.
Scope of work
Risk identification across the business including tail events, with commodity, currency and counterparty exposures mapped to the operating model and assessed separately across the four market segments the company serves.
Framework development designed to guide behaviour across the firm rather than to sit as documentation, with risk ownership placed on the functions that create the exposure and governance set around it for ongoing use.
Process change made to business philosophy and operations so exposure is reduced at source rather than hedged after the fact.
Hedging policy created and relationships established with hedging counterparties, with hedging decisions tied to identified exposures rather than to market view, and the policy structured for the finance team to operate.
Outcome and value
- Risk materially reduced through changes in philosophy and process.
- A risk management culture established across the firm as the first step to managing risk.
- Management focus shifted from sales volume to creating and enhancing firm value.
- A framework the company can continue to apply as it grows.