Analyze the def-14a by JPMorgan of advanced corporate finance - Term Paper Example

Analysis of the DEF-14a by J.P. Morgan of Advanced Corporate Finance JP Morgan Company’s risk management team looks like it has what can be termed as a qualified one based on its background. The members of the risk management team are well qualified, for instance given that Linda Bammann, who was the deputy head of JPMorgan risk management team since 2004 to 2005, has worked at high positions in different entities previously, including serving as a chief risk management officer before her job in JPM.

She has had a good experience in the field hence quite an experience in the field in addition to her academic qualifications (a degree in bachelors of Science Stanford University, as well as a master in arts degree in public policy- Michigan university.). Michael A Neal has had quite an experience too (JPMorgan Chase & Co.). He has had quite an extensive experience in management of large complex businesses within regulated industries around the world. As a vice chair person of the general electric company, he oversaw financial services as well as products provision to customers and organizations of different sizes in south America, north America, Australia, Asia and Europe.

He has experience strategic planning, risk management as well as operations (JPMorgan Chase & Co.). JP Morgan has a risk policy committee whose purpose is to assist the board in overseeing the exercise of the management in its responsibility to:1. manage capital, planning liquidity as well as analysis, 2. Assessing as well as managing the credit risk of the firm, risk of structural interest rate, market risk, liquidity risk, fiduciary risk, model risk, and investment risk.3. Ensuring that an effective system is in place, which is reasonably designed for evaluating as well as controlling such risks all through the firm (JPMorgan Chase & Co.). The basic responsibility of aiding the board in overseeing in respect to legal risks, operating risks, as well as compliance tests does rest with the company’s audit committee.

Every board committee does oversee issues of reputation risk within its responsibility scope. The way guidelines on membership in the director’s risk policy committee show that the committee is very independent and members are well vetted before they are given their posts. The firm has a chief risk management officer who does report to the company’s CEO and is accountable to the company’s board. The chief risk officer is well vetted before appointment and the proposed priorities, staffing plans as well as budget are reviewed annually.

The firm’s fiduciary risks are the responsibility of director’s risk policy committee (JPMorgan Chase & Co.). Risk management in the financial services business, involves assessment as well as quantification of business risks and then putting in place measures to control them. Risk management also happens to be part of compliance function and part of precise business units (Kolakowski). JPMorgan has done the best to put in place different units that are independent in risk decision making to ensure risks are anticipated, minimized hence well managed.

A bachelor’s degree is the minimum education recommended for one to work as a risk management officer, while an MBA is a requirement. Skills on strong quantitative are a requirement, hence a management science as well as use or development of predictive models (Kolakowski). JPMorgan has complied with all these requirements with even insisting more on working experience of the workers it recruits. In big positions, job demands May at times become overwhelming in unstable periods for a firm, when heavy decisions needs to done within a short notice.

Risk management may create bad adversarial relationships with a number of producers’ in particular securities traders. Power psychology is such that people whom are influential in a firm for instance executive management have a likelihood of resistance to play by the rules. JPMorgan should use its expertise and experience to identify who played outside the book and hold the person responsible. ReferencesJPMorgan Chase & Co. UNITED STATES SECURITIES AND EXCHANGE COMMISSION: Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.) . 2014.

29 Apr 2014 .Kolakowski, Mark. Risk Management. 2014. 30 April 2014 .