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CHECKING CORPORATE FUNDAMENTALS

We can revisit the traditional series of steps of the investment processes that extend from the John and Mary Smiths, to the bankers and fund managers, i.e. every reasonable investor. The diagram of investment project parties involved is used as a building block for demonstrating how the stakeholders interact in a basic model. In the orthodox models, the steps of managing business investment decisions are sequential. We can insert reality checks that focus upon risk to keep our risk-return view balanced, put back in question at every phase, leading if necessary to a complete revision of investment projects. Let us see these phases in turn:
1. Formulate a business plan.
2. Match the risk appetite to the risk offer.
3. Due diligence, not least to manage reputation risk.
4. Risk support and methodology.