Utility companies are exposed to significant wholesale price volatility and, increasingly, face the uncertainties of competitive customer markets. Methods for measuring market and credit risk must better reflect a company's business portfolio, as these companies are significant investors, borrowers or users of derivatives. External oversight bodies are requiring more rigorous financial disclosure and demonstration of robust corporate governance policies and practices. Energy trading and, now, emissions allowance trading have added to the need for good oversight.
There is increasing pressure on financial officers to demonstrate that risk identification and financial management are grounded in timely, accurate forecast and performance data on which top management can base strategic decisions. Review of existing financial and risk reporting and mapping of financial systems and data within both the finance and treasury functions can identify opportunities for process automation and synergies, encourage consistency of data and identify areas for control enhancements.
Our financial risk management specialists have developed a Finance Visioning Framework that helps today’s CFOs better understand which factors impact the effectiveness of the finance function. We focus on: