Enterprise-wide risk management: The power of cashflow-based metrics

Finding the best approach

In our previous article on risk management reporting we focused on value-at-risk, the risk metric that anecdotal evidence and recent surveys suggest is the staple metric for most firms. However, we pointed to the fact that, in practice, VAR is often limited to (and useful for) only part of a firm’s activities, and should be reassessed with respect to the alternatives that are available to determine the risks faced by energy companies at the enterprise level.

Enterprise-wide risk management can