Watch out, they might be calling you *!@# on Facebook.

Yesterday, I chaired a conference on enterprise risk management in São Paulo. Risk is becoming an altogether sexier subject as it dallies with digital and social networks. Firms are trying to figure out how they can seek to influence the message and contain a bad vibe in a world where everyone is a potential editor and journalist and perceptions, particularly negative ones, can spread like wildfire. Another major theme was the convergence of the roles of CFO and CRO. There are even mutterings that the two positions may one day merge into a CFRO (chief financial and risk officer).

Armando Castro, the chief marketing officer at insurance giant Zurich, emphasized just how rapidly social networks have gained influence over consumers and how difficult it is for companies to use traditional tools to deal with this new opportunity (or threat). Interestingly, he suggests that companies in Brazil may be particularly vulnerable to legal actions stemming from social network: Brazilians readily use terms that would be seen as racist and discriminatory in the Anglo-Saxon world such as ‘moreno’ (something akin to darkie). That and Brazilians’ propensity for chatting and strong opinions could be a lawyer’s field day. Compaines need policies, procedures and dedicated teams to check what’s being said about the brand, monitor for defamation and leaks from employee use of social networks, he suggests. Even so, no-one seemed supremely confident that they can greatly influence new media.

Alvaro Azevedo discussed how the CFO must increasingly oversee and take responsibilty for the work of the CRO. The two positions already overlap substantially and that convergence in roles is growing, he noted. This is a natural function of the growing centrality of risk awareness and mitigation, especially in the financial sector, and the recognition that growth has to be balanced with safety hence the greater use of return on risk capital as a benchmark. This converegence can cause CFOs and CROs to step on each other’s toes and creates some tensions, he admits. That’s especially the case where very clear definitions regarding who does what are not in place. The situation is likely to get worse before it gets better.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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