The concept of risk management was embedded in corporate governance in the late 1990s. Corporate governance guidance was issued and promoted based on reaction to scandals in the US and the UK over the last 20 years. The following is a presentation from the World Bank (2004):
• Internal fraud – Allied Irish Bank, Barings and Daiwa Bank Limited, $691 million, $1 billion, $1.4 billion respectively, fraudulent trading.
• External fraud – Republic New York Corp., $611 million, fraud committed by custodial client.
• Employment practices and workplace safety – Merril Lynch, $250 million, legal settlement regarding gender discrimination.
• Clients, products and business practices – Household International, $484 million, improper lending practices, Providian Financial Corp. $405 million, improper sales and billing practices.
• Execution, delivery and process management – Bank of America and Welles Fargo Bank, $225 million and $150 million respectively, systems integration failures, failed transaction processing.
• Damage to physical assets – Bank of New York, $140 million, damage to facilities related to September 11, 2001.
• Business disruption and system failures – Solomon Brothers, $303 million, change in computer technology resulted in ‘un-reconciled balances’.