S&P's fresh look at risk: A company's credit rating will reflect its ability to handle risk

February 2009
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Point of view: S&P's fresh look at risk: A company's credit rating will reflect its ability to handle risk

At a glance

Standard & Poor's is refining its ratings process to incorporate enterprise risk management review as practiced at non-financial companies. Will this help management and shareholders better understand risk and increase operating efficiency? Here’s what PwC thinks.

Highlights:

  • A rating change directly affects borrowing costs and investor confidence.
  • Organizations face an increasingly complex risk environment.
  • ERM provides a forward-looking framework that encourages a culture of performance and enhanced risk management.