Coping with setbacks

Most risk managers and employees in energy companies are familiar with the concepts of market risk and credit risk, but operational risk is receiving more attention in corporate boardrooms these days, writes Sandy Fielden

To understand the term 'operational risk' and its use in risk management, I turned to three documents that seek to define risk management theory and practice. In their 'Introduction and executive summary of recommendations', published in November 20021, the US-based Committee of Chief Risk Officers (CCRO) listed nine categories of merchant energy business risks.

The list includes four types of risk linked with markets and credit, as well as five types of risk associated with company operations