Risk management

The issue of risk management is of particular importance in financial institutions and enterprises, and shareholders, legislators, professional institutions and rating agencies use risk management and internal control to better manage corporate affairs. Organizational risk management is a relatively new phenomenon and a number of studies are still trying to examine how risk managers affect the processing of decisions in the organization. In order to provide risk management services, Holder Financial Group takes a systematic and integrated approach to overall management in determining the risks that a company faces. Therefore, Holding Financial Group, by implementing risk management in financial institutions, tries to make all the company’s risks clear and controllable for its managers. Holder Financial Group helps management achieve its goal – which is to maximize the value of the company’s assets. With the implementation of organizational risk management, all risks are seen in a coordinated and strategic framework. Organizational risk management can be considered as a process of corporate risk management in which both financial and non-financial risks such as operational risks and strategic risks are managed seamlessly. Successful companies in creating an effective organizational risk management program have gained a long-term competitive advantage over companies that manage risks individually (traditional risk management). There is conflicting evidence on the impact of organizational risk management on firm value.

The following table summarizes the definitions of individual risks in the financial and non-financial risk subsections. These risks have been identified in the companies surveyed by the group and include 7 risks in the financial risks subsection and 7 risks in the non-financial risks subsection. Considering the activities of the surveyed companies in the financial services sector, the definitions presented in the table are presented accordingly.

Systemic risk	It means the risk of internal connections and dependencies in a system or a market, which causes a crisis in the whole system or market by the occurrence of a failure in one part of the system and its spread throughout the system or market.
Competition risk	Mutual funds, investment advisors, financing companies, portfolio companies, brokerage companies, investment companies and rating agencies are considered competitors of the company and should be based on share and percentage. Domestic and foreign markets paid attention in this regard.
Market risk	Market risk is the potential for profit or loss due to changes in market conditions such as interest rates, commodity prices, exchange rates and other economic and financial variables such as stock prices, currency prices and marketing.
Liquidity risk	Liquidity has an easy and restrained concept that is not directly observable; However, in most cases, the ease of liquidation and conversion of an asset into cash is called liquidity. Liquidity risk indicates the price response to the trading volume. Liquidity risk is the financial risk that an asset, stock, or commodity can not be traded quickly in the market for a certain period of time without the effect of market price. This risk plays a significant role in asset pricing and market efficiency.
Capital risk	Capital risk means the combination of capital to manage the company’s business activities and the risks associated with those activities during periods of economic stability and in volatile conditions.
Liquidity risk	The likelihood that a company will be unable to meet its short-term financial obligations is called liquidity risk. This risk stems from three factors: inability to meet short-term financial obligations, inability to provide short-term financing when needed, and inability to provide short-term financing at cost-effective costs; In other words, asset liquidity risk is related to the company’s ability to obtain sufficient cash to pay off its debts. This risk is one of the most important risks for companies and may even lead to their bankruptcy in an unfavorable economic situation. Credit rating agencies pay special attention to this risk when awarding credit ratings.
Credit risk	The risk of failure and loss due to the failure of the customer is either a partner or considers the country based on risk.
2. Non-financial risks
Reputation risk	An action, transaction, investment or event that reduces confidence in the integrity or competence of a company vis-.-Vis customers, contractors, investors, legislators, employees and the general public. This risk is one of the most important risks of the company.
Manpower risk	In its 2008 report entitled “Global Human Resource Risks”, it identified human resource risk as the risk of programs and processes related to the organization’s employees, which, if properly managed, would place the organization among the market leaders.
Risk of rules and regulations	This risk arises due to changes in various laws in an economic society. The risk of changing laws severely affects manufacturing companies, institutions and financial institutions.
Political risk	Today, the world trade community faces a significant level of political risk, as it did in the past; But the nature of these risks has changed, and political risk is now a very complex and multidimensional phenomenon that has severely challenged the global trading community, especially in its careful assessment and management. Political risk Due to the gradual development of economic theory in the early twentieth century in most industrialized countries of the world, political events and unfavorable conditions in international affairs arose. Political risk is defined as the unexpected change in factors of production, trade in goods and services resulting from government actions and reactions.
operational risk	The risk of loss due to operational activities and human error is due to external factors that are neither related to market issues and risks nor to credit risks; Such as compliance risk, management risk, model risk, innovation risk, software risk and process risk. Operational risk is assessed when an organization does not perform its operations well; That is, in general, either the internal systems and the methods of doing the work are not well defined or not implemented properly. Operational risk is generally defined as the risk of human error or technical incidents or errors. This risk includes fraud, management errors and control deficiencies. A technical error may be caused by a defect in information, transaction processing, relocation systems, or any other general problem that occurs at the organization level.
Event risk	Refers to the risk of catastrophic events in the country and the world
Corporate governance risk	Proper establishment of corporate governance mechanisms is a key step in the optimal use of resources, promoting accountability, transparency, fairness and the rights of all corporate stakeholders. The basic premise of corporate governance and the independent auditing process – which is considered to be one of its most important components – is that the business unit seeks to protect the interests of its shareholders and increase the value of their shares. The risk of corporate governance is the lack of oversight and control to ensure that the company’s management acts in the interests of shareholders.