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Risk Management in NAMA: Practical Guidelines for Success

Explore the practical risk issues and quality control measures in NAMA business planning. Learn the golden rules and quality control questions for effective risk management.

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Risk Management in NAMA: Practical Guidelines for Success

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  1. Risk Management A Practitioner’s PerspectiveJoe Carr Chartered Accountants NAMA Forum Tuesday 29th March 2011 Belfast

  2. Contents • Understanding the ‘extraordinary’ context of NAMA • Practical risk issues in dealing with the preparation of NAMA business plans • Quality control of business plans; some fundamental questions • A few golden rules • Q&A

  3. Understand the ‘Extraordinary’ context of NAMA • Serious and systemic threat • NAMA creates a ‘Public Interest Entity’ • Overarching objective – National Interest (ROI) - (S33) N.I. economy • Standards • State are an involuntary creditor and NAMA Act confers extraordinary power on the agency to advance and protect the National Interest • Not preparing normal business plans

  4. Practical Risk Issues • Focus on some of the practical risk issues associated with business planning for NAMA clients: • Understanding the wider context of NAMA • Client acceptance and suitability • Commercial risk • Clarity of roles and expectations • Technical tools, methodologies and approach • Competence • Evidence, rigour, judgement • Documentation

  5. Quality control – some fundamental questions • Finance & Risk: • Business planning timeline – striking the right balance • Cash & Headroom • Debt reduction • Operating cost structure and level • Debt/equity ratio • Risk management • Residual risk exposure

  6. Quality control – some fundamental questions • Business Plan: • Opening position • Aims, goals, priorities • Internal capabilities and management • Assumptions, tasks & tactics • Targets, financial and non-financial • Implementation of tasks

  7. 6 Golden Rules • Client acceptance is a decision, make sure you make the right choice • Apply the same type of expertise, rigour and discipline that you would to an audit, accounts preparation • Understanding both breadth and depth of the business challenge is a prerequisite. Do not go where you do not know or where you are not comfortable

  8. 6 Golden Rules • Have clarity on: • Client and stakeholder objectives, goals and timeline • Advisor role and reasonable expectation of success • Approach/methodology • Inputs and timeline • Outputs • No guarantee on outcome • Document all key steps, milestones, meetings and evidence 6. Assign people with confidence, ability, experience, rigour and discipline to do assignment

  9. Q & A

  10. Contacts: Joe Carr Managing Partnerjcarr@mazars.ie Enda Gunnell Financial Advisory Partneregunnell@mazars.ie Tom O’Brien Financial Advisory Partnertjobrien@mazars.ie MazarsMazars Place Salthill Galway t +353 (0)91 570100 e mt@mazars.ie MazarsHarcourt Building Block 3Harcourt RoadDublin 2t +353 (0)1 4494400emazars@mazars.ie

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