This presentation looks at risk factors that businesses continue to review as part of managing their business operations.

1. UNDERSTANDING
RISK
MANAGEMENT
ISSUES FACING
BUSINESSES
ACROSS THE
WORLD
BY: PAUL YOUNG CPA, CGA
JUNE 20, 2019

2. PAUL YOUNG - BIO
• CPA, CGA
• Financial Solutions
• Academia
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. SUMMARY
Business relies on government as part of setting policies
that allow business to invest either domestically or
internationally
Countries require FDI as part of supporting their economy
as such geopolitics can drive risks to both government as
well as business
United Nations needs to return to its’ mandate of world
peace including accountability and transparency when it
comes to aid
Too many countries still have autocratic rules, especially in
Asia, Africa and the Middle East
Liberals around the world are to busy coddling extremism
as way to deflect it from happening in their country. The
problem is radical extremism will never be defeated
through hugs and kisses. The root cause of extremism
comes back to radical beliefs of what their religion is
telling them in terms of their own Caliphate.
Global protectionism is on the rise as USA is looking for
fair trade deals

4. AGENDA
What are Geopolitical
events?
2019 Key Issues
What is going with the
United Nations?
Supply Chain
Management
Integrated
Government Role EU and Hungary
Issues
•North Korea
•Qatar
•Iran
•Yemen
•Syria
•Saudi Arabia
Business Role
2018 Key Risk Areas -
Geopolitical

5. WHAT ARE GEOPOLITICAL EVENTS?
Geopolitics is a method of studying foreign policy to understand,
explain and predict international political behavior through
geographical variables. These include area studies, climate,
topography, demography, natural resources, and applied science of the
region being evaluated
Source - https://en.wikipedia.org/wiki/Geopolitics

6. KEY POLITICAL ISSUES FOR 2019
Source - https://www.bloomberg.com/news/articles/2018-12-05/governments-behaving-badly-political-risks-to-growth-in-2019?cmpid=socialflow-twitter-
business&utm_medium=social&utm_campaign=socialflow-organic&utm_source=twitter&utm_content=business
Issue Synopsis
Trade Wars Rise of Protectionism
Italy More and more countries are rising over UN led policies –
i.e. immigration pact
Brexit UK has not formalized their Brexit exit agreement with the
EU
USA Democrats Own the House of Representatives
Election Argentina, Indonesia, Australia, Canada, South Africa,
Nigeria, etc.
Oil Oil pricing and production
Asia Waterways South China Sea
Black Swan "My biggest risk is less to do with a particular country, it’s a
wild terrorist attack," Robin Niblett, the director of Chatham
House, said in an interview. An attack could take any form,
including cyber, with knock on consequences for the world
economy as a major incident could provoke a backlash from
governments

7. WHAT IS GOING WITH UNITED NATIONS?
UN does little to enforce oversight when it comes to foreign aid – Here are a few examples:
 The United Nations is losing staggering sums to corruption, mismanagement and bad decision-making ”
http://nationalpost.com/opinion/geoffrey-clarfield-the-united-nations-is-losing-staggering-sums-to-corruption-mismanagement-
and-bad-decision-making “
 Poland - All the funding to UN never got PM No Ethics a seat on the security council -
http://www.thenews.pl/1/10/Artykul/310011,Poland-chosen-to-join-UN-Security-Council
 UN and corruption - https://www.commentarymagazine.com/articles/how-corrupt-is-the-united-nations/
 “The cost of corruption to society is enormous. In its 2017 report, Global Financial Integrity estimates that illicit financia l
flows (IFFs) in 2014 alone ranged from US$1.4 trillion to $2.5 trillion. The World Economic Forum estimates that the cost
of corruption today equals more than 5 percent of global GDP ($2.6
trillion).”http://www.undp.org/content/undp/en/home/blog/2017/fighting-corruption-for-global-peace--development-and-
security.html
 Hamas/Foreign Aid - http://www.terrorism-info.org.il/en/21183/
 Somalia - https://fee.org/articles/how-foreign-aid-hurts-famine-relief-in-somalia/
The bottom line is the UN has failed to ensure foreign aid is getting to the most needed people in the world and/or stopping of civil
wars like Yemen, Iraq and Syria.
Source - https://www.slideshare.net/paulyoungcga/foreign-aid-transparency-and-accountability-october-2017

8. SUPPLY CHAIN INTEGRATION
• Globalization of Supply Chain
• Business exposure to areas
like climate change or
Governmental changes or
infrastructure or labor rates or
shipping rates or investment
rules or taxation or
environment regulations

9. GOVERNMENTAL ROLE
Governmental Structure
Democracy
Kingdom
Socialism
Government sets policies
Taxation
Regulations
Investment in infrastructure
Labor and Environmental Laws
FIPA and Trade Agreements

10. BUSINESS ROLE
Business needs to expand to
new market
Business needs to follow
laws and regulation in the
countries they do business

11. 2018 – KEY GEOPOLITICAL RISKS
Source - https://www.canadianmanufacturing.com/risk-and-compliance/top-5-global-risks-exporting-
companies-face-2018-206385/
1. North Korea escalation: War on the Korean peninsula is unlikely, but while the paths of escalation are
clear, de-escalation is harder to plot. The search is on for the least bad option. The risks of miscalculation
and accidental escalation are the highest they’ve been since North Korean leader Kim Jong-un assumed
power.
2. Large-scale cyber attacks against infrastructure: 2017 was the year of major but random disruptive
attacks. 2018 could see the likes of WannaCry, NotPetya and BadRabbit recur, but in a more powerful,
targeted and disruptive manner. National infrastructure systems are particularly at risk.
3. US gets protectionist: Low likelihood, high impact, but the threat is there: in a year of mid-term elections,
NAFTA negotiations fail to make enough headway, Donald Trump pulls the US out of NAFTA and the WTO,
and goes after China on trade, causing profound disruption to international commerce.
4. Regional rivalries in the Middle East: Ambitious Saudi Arabia and assertive Iran will not go to war, but
across the region their rivalry will inform and inflame conflicts and enmities in Syria, Lebanon, Iraq and
Yemen and between Israel and the Palestinian Territories.
5. Personalised leadership: Astride the business risk landscape is a collection of assertive world leaders
who rely heavily on nationalism and, to varying degrees, populism. Prone to capricious decision-making,
they find foreign companies convenient targets. More than ever, knowing the mind of the person at the top
is essential.

12. HUNGARY VS EU
The move saw some members of the European People’s Party bloc — of which Orban’s Fidesz movement is a
member — vote against their ally in Budapest.
Orban has for years deflected much of the international condemnation of Hungary’s electoral system, media
freedoms, independence of the judiciary, mistreatment of asylum-seekers and refugees and limits on the
functioning of non-governmental organizations.

13. IRAN
Source - http://www.cnn.com/2017/12/30/world/iran-protests-
issues/index.html
"The government is viewed as highly
corrupt, increasing inequality is seen by
the population as really a form of
injustice," he said, adding "this was
supposed to be a system that delivered
justice to the people after the revolution
of 1979 and it has failed."
Karim Sadjadpour, a senior fellow at the
Carnegie Endowment for International
Peace, said there's also a push to
secure equal rights for women.
Nader said women in Iran have been
fighting for decades for equal rights, but
especially in the last few years, such
efforts have become stronger.
"Women in Iran are highly educated.
They are involved in the workforce,
arguably more so than any other country
in the Middle East, and they are
continually suppressed. This is part of
their fight to gain their freedom and their
rights," he said.
Washington has imposed unilateral sanctions on five Iranian companies linked to Tehran’s ballistic
missile program.
“The Iranian people are rising up in over 79 locations throughout the country,” Haley told the
council.
“It is a powerful exhibition of brave people who have become so fed up with their oppressive
government that they are willing to risk their lives in protest.”
In this Feb. 13, 2017 file photo, Gholamali Khoshroo, Iran’s Ambassador to the United Nations,
speaks at a UN Security Council meeting at UN headquarters. (AP Photo /Mark Lennihan)
Russia’s envoy shot back that if the US view holds, the council should have also discussed the
2014 unrest in Ferguson, Missouri over the police shooting of a black teenager or the US
crackdown on the Occupy Wall Street movement.
China also described the meeting as meddling in Iran’s affairs, while Ethiopia, Kuwait and Sweden
expressed reservations about the discussion.
Britain and France reiterated that Iran must respect the rights of protesters, but French
Ambassador Francois Delattre said the “events of the past days do not constitute a threat to
peace and international security.”
Iran’s Ambassador Gholamali Khoshroo slammed the meeting as a “farce” and a “waste of time”
and said the council should instead focus on addressing the Israeli-Palestinian conflict or the war
in Yemen.
Source - http://www.france24.com/en/20180106-un-security-council-divided-over-iran-protests
or https://www.timesofisrael.com/divided-un-security-council-meets-on-iran-protests/
UNITED NATIONS

14. NORTH KOREA AND THE WORLD
Source - http://www.cnn.com/2017/08/05/asia/north-korea-un-sanctions/index.html

15. QATAR AND MIDDLE EAST
Source - https://seekingalpha.com/news/3271472-arab-nations-sever-ties-qatar?ifp=0
http://www.cnn.com/2017/06/05/middleeast/saudi-bahrain-egypt-uae-qatar-
Saudi Arabia, Bahrain, Egypt and the United Arab Emirates have broken off relations with
Qatar, in the worst diplomatic crisis to hit Gulf Arab states in decades.
The three Gulf countries and Egypt have accused Qatar of supporting terrorism and
destabilizing the region. Qatar -- which shares its only land border with Saudi Arabia -- has
rejected the accusations calling them "unjustified" and "baseless".

16. YEMEN CIVIL WAR
Source - https://news.sky.com/story/the-yemen-civil-war-needs-to-end-for-global-security-but-
there-is-little-hope-11237355
Yemen is worse than a failed state; it is a country in complete chaos and it is impossible to see
a realistic end to the vicious civil war that has created the world's worst humanitarian crisis
and sliced the country four ways.
Sana'a, the capital, is controlled by Houthi rebels. This rebel group emerged from the northern
mountains in 2014 to govern a city of around two million people.
Iran has sent arms and fighters to back the Houthis; Saudi Arabia in turn has thrown its support
behind the internationally recognised government and carried out sustained bombing of Sana'a,
drawing worldwide criticism because of the high number of civilian deaths.
Airstrikes on Sana'a seem to have lessened, perhaps in recognition that Riyadh's reputation was
taking a battering too, but Saudi jets continue to target towns and villages in the north of the country,
which goes largely undocumented.

17. SYRIA CIVIL WAR
Why was there a civil war?
Syria civil war was also about natural gas which has never been discussed much with MSM - http://www.zerohedge.com/news/2015-09-10/competing-gas-
pipelines-are-fueling-syrian-war-migrant-crisis “
“Assad refused to sign a proposed agreement with Qatar and Turkey that would run a pipeline from the latter’s North field, contiguous with Iran’s South
Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets – albeit crucially bypassing Russia. Assad’s
rationale was ‘to protect the interests of [his] Russian ally, which is Europe’s largest natural gas supplier”
What’s next for Syria?
• Rebuilding - http://www.middleeasteye.net/essays/after-war-who-is-going-pay-syria-reconstruction-russia-iran-assad-china-871238355 “Most
estimates range from $100bn to $350bn, with some as high as $1 trillion. Jihad Yazigi, editor of independent financial paper Syria Report, puts the sum
at the lower end of the range. “The World Bank and UN estimate it will need $100bn to repair what has been destroyed, with more needed to get Syria
back on track.”
• Who will help? Unless there are major policy U-turns by the EU, the US and Turkey towards the Assad government then Syria is not going to get the
tens of billions of dollars needed to get the country back on its feet. "The narrative that billions [of dollars] will come is wishful thinking," said Kattan.
Instead, Syria will have to rely on small-scale investments and infrastructure developments to push itself along. Reconstruction will only be a long-term
project – and that is only if Damascus eventually develops a strategy. Alam said: "It will be small investments and a gradual regeneration of businesses.
No game-changers, but it will keep the local economy going.“
• Syria is approaching countries like China, Iran and Russia for help in terms securing funding to re-build infrastructure -
http://www.scmp.com/news/china/diplomacy-defence/article/2121552/syria-courts-china-rebuilding-push-after-fall-islamic
Issues with Assad:
• Chemical weapons used suppressed rebels - http://www.bbc.com/news/world-middle-east-42944033
• Assad needs to replaced with democratic elections - https://www.rappler.com/world/regions/middle-east/195186-
turkey-says-assad-must-go-some-point
• The problem with Syria are fractions, i.e. Kurds, Yazidis, Christians and Arabs - https://theconversation.com/stakes-
are-high-as-turkey-russia-and-the-us-tussle-over-the-future-of-syria-90454

18. SAUDI ARABIA
• “There will be "severe punishment" for Saudi Arabia if it turns out that missing journalist Jamal Khashoggi was
killed in the Saudi consulate in Istanbul, President Trump said in a 60 Minutes interview that will air on Sunday. But
he does not want to block military sales to kingdom. "I don't want to hurt jobs... I don't want to lose an order like
that,” he said, singling out Boeing (NYSE:BA), Lockheed (NYSE:LMT) and Raytheon (NYSE:RTN). "And you know what,
there are other ways of punishing.” - https://ca.news.yahoo.com/saudi-arabia-says-respond-economic-sanctions-
spa-112824051.html
• Saudi Arabia continues to suppressed freedom of speech - https://www.businessinsider.com/timeline-of-canada-
saudi-arabia-diplomatic-feud-over-human-rights-2018-8
• It might be time to remove countries like Saudi Arabia from the UN Human Rights Council -
https://www.ohchr.org/en/hrbodies/hrc/pages/currentmembers.aspx

19. LATIN AMERICA
• Rise of Central American Gangs - https://thewire.in/world/what-lies-behind-central-americas-gang-violence “El
Salvador, Honduras and Guatemala in Central America have the highest homicide rates in the world. Gangs,
popularly known as maras, are responsible for much of the violence and crime. Most of the killers and victims
are gang members themselves caught in turf battles.” – USA help contribute to the problem through their
foreign policy work “The US is responsible, to a large extent, for the civil wars in Central America. To protect and
promote the commercial interests of the American corporations in the region, the US administration had
converted the Central American countries into ‘banana republics’ by undermining democracies and encouraging
and installing right-wing military dictatorships.”
• Where is the UN on security and government corruption - https://www.ozy.com/politics-and-power/central-
american-activists-renew-efforts-to-fight-elite-corruption/90852
• GDP growth is a struggle for many countries in latin America - https://www.thedialogue.org/analysis/what-does-
2019-hold-for-economies-in-latin-america/
• Poverty problems - https://www.wsj.com/articles/central-america-migrants-flee-crime-and-poverty-despite-u-s-
crackdown-1529924401
Conclusion:
• UN needs to bring stabilization to Latin America through peacekeeping and economic development supports
• FDI into latin America needs to be encourage as part of economic development to help improve the quality of life
for Latin America
• More investments required in education - http://www.ipsnews.net/2018/07/half-young-people-poor-central-
american-neighbourhoods-want-migrate/

20. CANADA / ISIS It is amazing how you can search out for people that share your view when it comes to ISIL threat. Goodale did say
on TV that he did not think you re-habilitate ISIL soldiers, so what changed?
http://torontosun.com/opinion/columnists/malcolm-trudeaus-de-radicalization-approach-is-dangerous
http://www.ctvnews.ca/canada/rise-of-extremism-in-2017-should-be-a-wakeup-call-for-canada-1.3706645
It is amazing the government says they are concerned for the safety of Canadians and yet says little on how it will
handle the 60 so called ISIS fighters. Here is information on ISIS:
1. http://www.cnn.com/2017/10/01/americas/edmonton-vehicle-attacks-investigation/index.html - ISIS attack
on a police officer
2. LPC defeats motion on ISIS - https://pamelageller.com/2017/12/trudeua-liberals-support-isis.html/
3. Motion on LPC plans to de-radicalized ISIS -
https://www.facebook.com/GlobalNews/videos/1616460011735091/
4. ISIS - https://youtu.be/bGcyuY_pBLM
5. Gender https://www.facebook.com/michellerempelmp/videos/1629422210450425/
6. Trudeau and Terrorist - https://www.thestar.com/news/canada/2016/09/29/canadian-suspect-in-terror-
probe-took-selfie-with-justin-trudeau.html
7. Trudeau and lack of respect for Canadians - https://www.spencerfernando.com/2017/11/30/trudeau-show-
emotion-defending-people-hate-canada/
8. Deletion of records -
https://www.therebel.media/trudeau_has_rcmp_delete_5_000_intelligence_records_on_muslim_migrants
9. Radicalization - https://www.facebook.com/CBCPolitics/videos/1875219699173523/
10. Goodale again is blaming Harper -
https://www.facebook.com/michellerempelmp/videos/1622101751182471/
11. Public Safety is not tracking when intervention is used for radicals -
http://www.cbc.ca/news/politics/deradicalization-canada-isis-fighters-program-1.4414999?cmp=news-
digests-canada-and-world-morning
““Mr. Speaker, the Conservative Party learned
nothing from the last election and the lessons
Canadians taught them. They ran an election on
snitch lines against Muslims, they ran an election
on Islamophobia and division, and still they play
the same games, trying to scare Canadians. The
fact is we always focus on the security of
Canadians, and we always will. They play the
politics of fear, and Canadians reject that.”
http://torontosun.com/opinion/columnists/furey-
trudeau-labels-legit-terrorism-questions-as-
islamophobia

21. RISK MANAGEMENT
• More and more companies include risk management as part of the reporting

22. RISK MANAGEMENT MARKET

23. OPERATION RISK/ CATHERINE MCKENNA
Top Operational Risks issues by Business
1. Data Compromised
2. IT Disruption
3. IT Failure
4. Organizational Change
5. Theft and Fraud
6. Outsourcing and Third-Party Risk
7. Regulatory Risk
8. Data Management
9. Brexit
10. Mis-Selling
• Source - https://www.risk.net/risk-management/6470126/top-10-op-
risks-2019
No where does business have climate change as top operational risk issue for business!

24. RISK FACTORS – INSURANCE / CATHERINE MCKENNA
• Source - https://www.pwc.com/us/en/industries/insurance/library/top-issues.html or
https://assets.kpmg.com/content/dam/kpmg/.../ca-emerging-risks-global-insurance.pdf
• Insurance does assess many factors as part of identifying
payouts
• It is not one factor that is considered but many factors
• Insurance companies are deploying many tools like machine
learning , AI and Risk Analytics - https://emerj.com/ai-sector-
overviews/machine-learning-at-insurance-companies/

25. ADDITIONAL SOURCES
• Reporting challenges facing business: https://www.slideshare.net/paulyoungcga/reporting-challenges-
for-office-of-finance-accounting-finance-tax-risk-management-internal-audit-november-2016
• BEPS Reporting - https://www.slideshare.net/paulyoungcga/beps-oecd-mandate-tax-reporting-close-
consolidate-and-reporting-solutions
• Risk Management - https://www.slideshare.net/paulyoungcga/why-development-of-risk-management-
program-important-to-a-business