Review of the literature on risk management

Review of the literature on risk management This chapter reviews the literature on the risk management and corporate governance in the banking sector. Part of the literature also attempts to provide a relationship between the independence and financial knowledge of the board of directors and audit committee, and risk management practices by referring to both empirical and analytical research. 2.1 Risk Management in the banking sector When discussing the challenges faced by financial institutions in managing risk, it is important to have a consistent definition of the term risk. Risk can be defined as the volatility of a corporations market value. Risk management involves the protection of a firms assets and profits. Moreover, not only does it provide profitability but also other advantages like being in line with obedience function toward the rule, increasing the firms reputation and opportunity to attract more customers in building their portfolio of fund resources. Cebenoyan and Strahan (2004) suggest that [à ¢Ã¢â€š ¬Ã‚ ¦] the benefits of advances in risk management in banking may be greater credit availability, rather than reduced risk in the banking system (p.19). This means that banks will have a greater opportunity to increase their productive assets and profit. Only those banks that have efficient risk management system will survive in the market in the long run. They can follow a four-step routine to red uce their risk exposures and achieve their risk management objectives, as shown below. Figure 1-Steps for implementing risk management To properly manage risks, banks must firstly identify and classify the sources from which risk may arise at both transaction and portfolio levels. Risks inherent in lending activities include market risk, liquidity risk, credit risk and operational risk. Market risk is the risk resulting from adverse movements in the level of market prices of equities, currencies, interest rate instruments and commodities. Banks are always facing the risk of losses in on and off-balance-sheet positions arising from undesirable market movements. Banks are inherently vulnerable to liquidity risk due to their fundamental role of transforming of short-term deposits into long-term loans. The FSA has defined liquidity risk as: The risk that a firm, though solvent, either does not have sufficient financial resources available to enable it to meet its obligations as they fall due, or can secure them only at an excessive cost. Another risk that banks face is credit risk. It is the risk that can be incurred if the counterparty fails to meet its obligations in a timely manner. Loans are the most palpable source of credit risk in many of the banking systems; however, other sources of this risk originate through other activities of banks such as acceptances, trade financing, interbank transactions, financial futures, foreign exchange transactions, swaps, equities, options, bonds, and in the extension of commitments and guarantees, and the settlement of transactions. Operational risk, as its name suggests, is a risk arising from execution of a companys business functions. The Basel Committee has defined operational risk as: the risk of losses resulting from inadequate or failed internal processes, people and systems, or external events, such as the failure of computer systems or error and fraud on the part of staff. Apart from those risks mentioned above, the Federal Reserve System has also recognised two other risks: legal risk and reputational risk. Legal risk is the risk of loss caused by sanctions or penalties originating from court disputes due to breach of contract and legal obligation. Another legal risk relates to regulatory risk, i.e., the risk of loss resulting from sanctions and penalties pronounced by a regulatory body. Reputational risk may be defined as the risk of loss caused by a negative impact on the market positioning of the bank. It can be seen as the blowing up of an initial loss, arising from credit, market, liquidity or operational risks. However, banks hardly pay attention to these categories of risks. Once identified, the risks should be evaluated to determine their impact on the companys profitability and capital. This entails measuring them by using various techniques ranging from simple to sophisticated ones. For example, market risk can be measured by using Value at Risk. This stage also calls for estimating three dimensions of each exposure: the potential frequency of losses that exposures have produced or may produce, the potential impact on the organisation if a loss should occur and the potential variation in losses that will occur during the exposure period. Accurate and timely measurement of risk is necessary because with these types of data the risk manager can determine which exposes are most serious and which deserve the most immediate attention. After measuring risk, bank managers should establish and communicate risk limits through policies, standards, and procedures that define responsibility and authority. These limits should serve as a means to control the risks associated with the banking institutions activities. There is a variety of mitigating tools that banks may employ to minimise the loss exposures. These tools may be diversification, securitization and even derivative such as withdrawal option, Bermudan-style return put option, return swap, return swaption and liquidity option. The final step involves appraising the operation of the program regularly to be sure that it is achieving planned results. It helps the managers to evaluate the wisdom of their decision-making. To efficiently monitor risk, all material risk exposures should be identified and measured again. To facilitate this procedure, banks should put in place an effective management information system (MIS) that will provide directors and senior managers with timely reports on the operating performance, financial condition and risk exposure of the firm. If corrective action is indicated at this stage, the first three steps should be repeated. 2.1 Corporate Governance in the banking sector Corporate governance is a term that is now universally invoked wherever business and finance are discussed. Its purpose is to coordinate a conflict of interest among all parties relationship within the company and to develop a system that can reduce or eliminate the agency problems arising from the separation of ownership and control (OECD, 1997). Agency problem occurs when the agents of an organization (e.g. management) use their power to satisfy their own interests rather than those of the principals (e.g. shareholders). It may also refer to simple disagreement between agents and principals. For example, the board of directors may disagree with shareholders on how to best invest the companys assets, especially when the board of directors wishes to invest in securities that would favour their interests. Not merely does the term corporate governance carries different interpretations, its analysis also involves diverse disciplines and approaches. One of the most quoted definitions of corporate governance is the one given by Shleifer and Vishny (1997): corporate governance deals with the ways in which suppliers of finance to corporations assures themselves of getting a return on their investment. The Cadbury Report, however, defined corporate governance as the system by which companies are directed and controlled (para 2.5). Additionally, it recognised that a system of good governance allows the board of directors to be free to drive their companies forward, but exercise that freedom within a framework of effective accountability (para 1.1). The Hampel Report, whilst accepting the Cadbury definition of corporate governance, also noted that the single overriding objective of companies is the preservation and the greatest practical enhancement over time of their shareholders investment ( para 1.16). In a similar vein, Charkham (1994) identified two basic principles of corporate governance: That management must be able to drive the enterprise forward free from undue constraint caused by government interference, fear of litigation, or fear of displacement. That this freedom- to use managerial power or patronage- must be exercised with a framework of effective accountability. Nominal accountability is not enough. In the banking sector, however, corporate governance differs greatly with other economic sectors in terms of broader extent of claimants the banks assets and funds. In manufacturing corporations, the issue is to maximise the shareholders value but in banking, the risk involved for depositors assumes greater importance due to the fact that almost every bit of banks investment are financed by the depositors funds. If it goes bankrupt, it will be depositors savings that the bank will lose. Indeed, Macey and OHara (2001) states that a broader view of corporate governance should be adopted in the case of banking institutions, arguing that because of the peculiar contractual form of banking, corporate governance mechanisms for banks should encapsulate depositors as well as shareholders. Arun and Turner (2003) also support this argument. Furthermore, the involvement of government in the banking sector is discernibly higher compared to other economic sectors due to the larger interests of th e public (Caprio and Levine, 2002; Levine, 2004). Rational depositors require some form of guarantee before depositing their wealth in banks. Yet, it is relatively difficult for banks to provide these guarantees to them because communicating the value of a banks loan portfolio is quite impossible and very costly to reveal. As a consequence of this asymmetric information problem, bank managers can have an incentive to invest in riskier assets than they promised they would ex ante. To assure depositors that they will not expropriate them, banks could make investments in brand-name or reputational capital (Klein, 1974; Gorton, 1994; Demetz et al, 1996; Bhattacharya et al, 1998), but these schemes give depositors little confidence, especially when contracts have a finite nature and discount rates are sufficiently high (Hickson and Turner, 2003). The opaqueness of banks also makes it very costly for depositors to constrain managerial discretion through debt covenants (Capiro and Levine, 2002, p.2). As such, government interventions provide the lacking assurance to economic agents in the form of deposit insurance. Nevertheless, although the government provides deposit insurance, bank managers still have an incentive to opportunistically increase their risk-taking, but now it is mainly at the governments expense. Apart from supporting the argument that a broader approach to corporate governance should be adapted to banking institutions, Arun and Turner (2003) also argue that government intervention do restrain the behaviour of bank management. The Bank for International Settlements (BIS) has defined the governance in banks as the methods and approaches used to manage banks through the board of directors and senior management which determine how to put the banks objectives, operation and protect the interests of shareholders and stakeholders with a commitment to act in accordance with existing laws and regulations and to achieve the protection of the interests of depositors. The Table 1 below shows the general principles concerning corporate governance issued by the Basel Committee specifically for bank boards and senior management. Principle 1 Board members should be qualified for their positions, have a clear understanding of their role in corporate governance and be able to exercise sound judgment about the affairs of the bank. Principle 2 The board of directors should approve and oversee the banks strategic objectives and corporate values that are communicated throughout the banking organisation. Principle 3 The board of directors should set and enforce clear lines of responsibility and accountability throughout the organisation. Principle 4 The board should ensure that there is appropriate oversight by senior management consistent with board policy. Principle 5 The board and senior management should effectively utilise the work conducted by the internal audit function, external auditors, and internal control functions. Principle 6 The board should ensure that compensation policies and practices are consistent with the banks corporate culture, long-term objectives and strategy, and control environment. Principle 7 The bank should be governed in a transparent manner. Principle 8 The board and senior management should understand the banks operational structure, including where the bank operates in jurisdictions, or through structures, that impede transparency (i.e. know-your-structure). Table 1- Principles of corporate governance for bank boards and senior management 2.2 Corporate Governance Mechanism According to agency theory, the corporate governance mechanisms reduce the agency problem between investors and management (Jensen and Meckling, 1976; Gillan, 2006). Traditionally, these mechanisms can be classified as internal and external. Llewellyn and Sinha, (2000) states that internal corporate governance is about mechanism for the accountability, monitoring, and control of a firms management with respect to the use of resources and risk taking. Its main mechanisms are the board of directors, the ownership structure of the firm and the internal control system (Gillan, 2006). Whereas, external corporate governance controls encompass the controls external stakeholders exercise over the organisation and its primary external mechanisms are the takeover market and the legal/regulatory system. However for the purpose of this paper, we will mainly focus on some internal corporate governance mechanism such as the board of directors, more precisely on its independence and financial knowledge. Corporate governance best practices have also stressed in particular the key role played by the audit committee in reviewing a firms internal control system. Internal control systems contribute to the protection of shareholders interests by providing reasonable assurance on the reliability of financial reporting, effectiveness of operations and compliance with laws and regulations (COSO, 1994; 2004). As such, we will also draw some attention on the audit committee. 2.3 The boards independence The popular media as well as corporate governance experts have characterised boards largely as rubber stamps for management. They are the link between the shareholders of the firm and the managers entrusted with undertaking the day-to-day operations of the organisation (Monks and Minow, 1995; Forbes and Milliken, 1999). As stated in principle 4 above, bank boards should properly supervise the work of managers. Which type of directors can perform better this duty than independent director? In fact, such directors can bring additional experience as well as clarity of thought to deliberations independent of views of management. Moreover, since their careers are not tied to the firms CEO, outside directors are believed to be more powerful in keeping efficiently the firms top management (Fama, 1980; Fama and Jensen, 1983) and so could be associated with better performance. Some papers do support this theory. Baysinger and Butler (1985), being among the first studies, find that the relative independence of boards has a positive effect on the firms average return on equity by comparing 266 major US businesses over a ten-years period. Kesner (1987); Weisbach (1988); Rosenstein and Wyatt (1990); Peace and Zahra (1992); Ezzamel and Watson (1993); MacAvoy and Millstein (1999); Brown and Caylor (2004) and Ho (2005) also show that shareholder returns are enhanced by having a greater proportion of outside directors on the board. Research by Brickley, Coles, and Terry (1994) shows significantly higher returns to firms announcing poison pill  [1]  when outside directors dominate the board. Other studies supporting the benefit of the boards independence are Dechow and Sloan (1996); Beasely (1996) and Klein (2002) who state that as outside membership on the board increases the likelihood of financial statement fraud decreases. There is also Black et al. (2006) who reports that firms with 50% outside directors have approximately 40% higher share price by studying 515 Korean firms. And more recently, Staikouras C. K., Staikouras P. K. and Agoraki M. K. (2006) find that the percentage of independent directors is positively related with performance measured by Tobins Q on a sample of European banks. On the other hand, others find no convincing evidence that the level of outside directors on the board do add value to corporate performance. For instance, Fosberg (1989) finds that firms whose board is composed of a majority of outside directors do not have a higher performance as measured by the firms ROE or sales. Similarly, Hermalin and Weisbach (1991) find that non-executive directors have no impact on corporate performance in their sample of 142 NYSE firms. Pearce (1983) also find no relationship, as too Changanti et al. (1985) in their study of board composition and bankruptcy. The lack of relation between these two components has also been confirmed by Klein (1998), Bhagat and Black (2002) and Hayes, Mehran and Scott (2004). Other scholars refuting the effectiveness of outside directors on the board are Subrahmanyam et al. (1997) and Harford (2000) for the acquisition transactions, Core et al. (1999) for CEO compensation and Agrawal and Chadha (2005) for earnings restatements . It is normally the board of directors which overviews and approves the risk management policies. But, few papers have tried to link its independence to the firms risk management practices and hedging. By analysing a sample of bank holding companies, Whidbee and Wohar (1999) find that the likelihood of using derivatives seem to increase with the presence of external directors on the board but only when insiders hold a large proportion of the firms shares. Borokhovich et al. (2004) demonstrate that firms most active in hedging risk, especially when making use of interest rate derivatives usage, are those whose boards are dominated by external directors. Conversely, Dionne and Triki (2004); Mardsen and Prevost (2005) point out that outside directors has no impact on the firms risk management policy. Given the mixed empirical findings, it is quite difficult to assert whether the board independence contribute to corporate performance and the effectiveness of risk management. Although Fields and Keys (2003) assert that there is overwhelming support for independent directors providing superior monitoring and advisory functions to the firm, a unique and clear sign concerning the effect of the boards independence on any decision including the risk management one could not be predicted. 2.4 The financial knowledge of the board To adequately perform their supervision role, the board of directors must have financial knowledge  [2]  . Indeed, when board members are generalists and lack the technical financial knowledge to understand the complicated reports presented to them, they could vote for motions that increase the risks facing of the firm to a large extent. The company may collapse in this way and therefore hinder the shareholders interest. Because of the banks dominant position in the economy; they should possess some financial expertise directors on its board so as to make better decisions that will not lead the firm to go bankrupt. However, given its importance, the research on the value of the boards financial knowledge is quite scarce. At times, reports recognising the benefits of the boards independence also recommend financial literacy/expertise for directors in monitoring the firms performance. In fact, Booth and Deli (1999) and Guner, Malmendier and Tate (2004) suggest that commercial bankers on boards provide the financial skill needed to enable the business to contract more debt. Thus, this states that financial directors do add value to the firm. There is also Agrawal and Chadha (2005) who discover that there is lower earnings restatement in firms whose boards have accounting or financially knowledgeable independent directors. However, Rosenstein and Wyatt (1990) provide evidence that positive abnormal returns associated with the addition of an outsider to the board are higher when the latter is an officer of a financial firm. Later on, Lee, Rosenstein and Wyatt (1999) do come to the same conclusion. However, they were unable to make any statistically difference among the reaction of the three categories of financial directors they consider: commercial bankers, insurance company officers and investment bankers. To the best of our knowledge, researches on the boards financial knowledge have only been related with the firms performance and not specifically on its impact on risk management practices. As mentioned earlier in this study, the board of directors is usually responsible for the firms risk management policies. In other words, risk management is at the core of any board members charter. Financially knowledgeable directors will obviously make better decisions on risk management practices since they will have the technical background to understand the sophisticated tools involved in risk management transactions. As such, firms whose boards are composed of financially knowledgeable directors engage more actively in risk management. 2.5 The audit committee The audit committee is intended to provide a link between the board and the auditor independent of the companys management, which is responsible for the accounting system (IOD, 1995). The chief objectives of an audit committee are to improve the quality of financial reporting, to reduce the potential authority for the non-executive director, to improve the channel of communication with the external auditor and, perhaps most importantly, to review the adequacy of the companys financial control systems. Tricker (1984) defines audit committee as being an important vehicle for ensuring the supervision and accountability at board level. As such, audit committees are very important in banking to safeguard the shareholders interest as well as the public trust. Just as for the board of directors, independence is also considered important for an audit committee because outside directors can exercise their voice and be seen to make a valuable contribution since they are free of any influence arising from the firms CEO. Thus, the reported empirical evidence supports this argument. Klein (2002) shows that independent audit committees reduce the likelihood of earnings management, thus improving transparency. In addition, Abbott, Park and Parker (2002) argue that firms with audit committees comprising entirely of independent directors are less likely to have fraudulent or misleading reporting. Ho (2005) states that there is a strong positive link between independent audit committee and corporate competitiveness and also with return on equity after analyzing the international companies from 1997to 1999. Brown and Caylor (2004) do provide evidence that audit committees comprising of independent directors are positively related to dividend but not t o operating performance. On the other hand, some authors find a negative relationship or simply no relation at all between independent audit committee and the firms performance. Hayes, Mehran and Scott (2004) prove that the firms performance measured by the market to book ratio is not affected by the proportion of outside directors sitting on the audit committee. Agrawal and Chadha (2005) do come to the same conclusion by indicating that independent audit committee members are unrelated to earnings restatement. There are also Beasley (1996) who finds no apparent correlation between audit committees composition and financial statement fraud, and Klein (1998) who reports no relation between share prices and the audit committees composition. Yet, Carcello and Neal (2000) report a negative relationship between the probability of receiving a going-concern report and the proportion of outsiders on the audit committee. In addition to independence, the accounting and financial expertise of members of the audit committee has also received widespread attention from the media and regulators  [3]  . An audit committee with such characteristics is expected to provide effective monitoring as it possesses the skills needed to understand what is going on in the organisation. Interestingly, Agrawal and Chadha (2005) show that firms whose audit committees have an outside director with accounting background or financial knowledge are less likely to report earnings restatement while Abbott, Parker and Peters (2002) discover that the absence of a financially competent director on the audit committee is highly associated with an increased in financial misstatement and financial fraud. Xie, Davidson, and DaDalt (2003) find that the presence of investment bankers on the audit committee decreases discretionary accruals in a firm. Davidson et al. (2004) and Defond, Hann and Hu (2004) show that the market has a po sitive reaction following the announcement of directors with accounting /auditing experience on audit committees board. The audit committee is also responsible for evaluating the risk exposures and the measures taken to monitor and control these exposures. To our knowledge no paper has tried to link audit committees composition with risk management practices. Because of the mixed and conflicting argument on independence, it is quite difficult for us to attest whether audit committees independence encourage more corporate hedging. Furthermore, risk evaluation and risk management tools are quite difficult to use and thus understanding them requires a good grasp of mathematics and statistics. As such, we expect firms whose audit committees members are qualified as accounting/financial expert to engage more actively in risk management practices. Besides independence and accounting/financial knowledge, the Cadbury Report has insisted that all listed companies should have an audit committee comprising of at least three members. This is to urge firms to devote significant director resources to their audit committees so that audit committees monitor the firms management more efficiently. However, several studies support the idea that larger boards can be dysfunctional since they may be plagued with free rider, communication problem and monitoring problems  [4]  . Therefore, as long as the increase in the audit committees size does not pose these types of problems, firms complying with this requirement are expected to report a higher hedging ratio. Often, corporations, especially financial ones, create another committee named risk monitoring committees. This type of committee is often responsible of the risk monitoring of the firm. However, this does not imply that audit committee is no longer responsible for evaluating and managing risks. It must still discuss and evaluate risk management processes. In other words, the audit committee is there to review risk management processes proposed by the risk management committee. As such, we assume that the same characteristics as the audit committee should be applied to this type of committee to fulfil their duties well.

P1 Unit 4 Health and Social Level 3

Childhood The childhood development of the individual followed the normal development patterns that are expected. In the childhood stage the individual development changed rapidly and their ability to be active and learn new skills improves on a daily basis. During childhood a child will grow steadier compared to an infant. A child’s body and organs size grows at a steady pace. By the age of 6 a child’s head will be 90% of a full adult size even though the rest of a child’s body has a lot more to grow and to develop. Related essay: Unit 4 M1: Health and Social Care, Level 3 Child Care Level 2 AssignmentsUntil a child reaches late childhood, and entering adolescence, an individual’s reproductive organs are still not fully developed. Infants and children can suffer from delayed development. This could cause potential effects and risks on a person’s development. This can happen in the first 5 years of a child’s life and this can be cause by brain damage, poor or no interaction with care givers, diseases, learning or behavioural disabilities, visual or hearing disabilities. The factors mentioned can cause a child to suffer from delayed development.Emotional and social development in a child will change a huge amount due to their change in their daily routine when they going into education and they aren’t around their family as they are used to within infancy. From age 4-9 years old is the first social learning of social development in a child. From a young age, young child ren are emotionally attached and dependent on their care givers. The change within the introduction of school and social environments can be a struggle for some children to understand.For emotional development the key skills within childhood are understanding self and other, and is a focus within development in schools to ensure that children are aware of who they are the differences within society and other people. Imagination is used a lot in children they use it to begin to understand social situations and roles within life. Relationships within the family become more important and the child begin to have a greater understanding of feelings and emotions and are now able to talk about these feelings and have an understanding of what they mean.My client Dylan followed the normal development patterns that are expected in the childhood stage. He continued to grow and he became the tallest in his class at school. His motor skills come a lot more complex, he was learning to ride a with out stabilizers and by the age of four was able to ride his bike without stabilizers without falling off. He enjoyed playing football with friends and also really enjoyed going swimming. Dylan didn’t suffer from any delayed development and continued to grow at a normal rate through to adolescence.Dylan really enjoys going to school and his favourite subjects are science and music. He doesn’t have problems at school with learning new thing. He is really good at science and when at home Dylan also has an app that he is able to use to help with his science a little bit more. Dylan has 6 friends at school and 2 of them are his best friends. He is also really close to his dad. At school Dylan never falls out with his friends. He loves spending time with his dad and also is quite close with his sister there all enjoy going out for bike rides. Dylan doesn’t attend any after school clubs or any clubs in school time.Dylan shows his emotions so that his parents can tell w hat is wrong with him. He is now also beginning to learn to cope with their emotions so he can tell people how he is really feeling. Adolescence In the adolescence stage, individuals begin to start puberty, for an average girl this is ages 11 to 13 years old, but it varies and some may begin earlier and some may be developing late. Generally girls start puberty before boys who often start between 13 to 15 year olds. Puberty is a developmental stage which prepares the body for sexual reproduction.It is triggered by hormones and causes different changes for both girls and boys. Girl’s sexual development involves the starting of periods and the increase of emotions occurring. The formal operational stage of Piaget’s theory applies to an adolescences intellectual development which states that ‘The child begins to behave like an adult within this stage. They are going through transitions in intellectual development and the process and transition of primary to secondar y education. ’ There are various intellectual skills that an adolescent will learn within this life stage.When in the adolescent life stage, the emotional development norms for an individual is to learn their personal identity and they must leant about who they are about how to control their emotions within the change of puberty. Low self-esteem and confidence issue is often something most teenagers struggle with. With adolescence secondary learning occurs, a person’s self-worth can change within this life-stage due to the social situations that an individual had to be within, also their use of clothing, language and religion etc. The introduction of hormones can often change how teenagers see themselves.Adolescent’s independence that they go through can affect their social and emotional development. My client Stacey had her first period when she was 13. She didn’t suffer any physical or mental problems when she first started her periods. Stacey had to mo ve to a new secondary school because of her old school closing down. She enjoyed doing maths and health and social care; she was also really good at health and social care. Stacey gained lots of good qualifications to leave school with. She didn’t have any problems with the teachers or pupils but she had a problem doing science because she couldn’t get the hang off it.She planned her future while she was at school so she could get an idea of the qualification that she would require. Stacey also knew what she wanted to be when she left school, she said that she would like to become a midwife. She left school 2 years ago and went back to do another 2 years of sixth form to do health and social care and English to try and get some more qualifications. Stacey didn’t have any conflict at home with her parents. All of her family relationships are good but they have had their ups and downs. Stacey is very popular at sixth form and she had got some best friends which sh e can trust with all of her problems.She had a few groups of different friends which she can be herself around. She doesn’t have any peer influences. Adults You adults are often at peak of physical performance between the ages f 18-30. Older adults tend to lose stamina and strength as they get older, but these changes are not normally noticeable. There are a huge number of changes that are related to age and they slowly become clearer as and adult gets older. Some people cannot hear a high pitched sound as they reach there later adulthood, along with changes in mobility and hair loss.With older adults, women go through menopause and a change that occurs around the ages of 45-55 year olds is a stop in the menstrual cycle, and a large reduction of eggs within the ovaries. A decrease in progesterone and oestrogen that is produced by the ovaries, which can cause a lack of sexual interest compared to early adulthood. Older adults often gain weight due to many adults still eating t he same size portions as what they did within early adulthood but due to less physical activity taking place there is less need to take in as many calories; this can cause a risk such as diabetes and heart disease.By adulthood an individual has reached their higher training and education and will understand many life skills which will be important to their development within social situations. There are different changes for adults with their emotional development. It is a key task of early adulthood that learning to cope with emotional attachments such as a partner. The social development of an adult remains to keep a strong friendship network, for most people changed in job roles and other critical development issues, adults friendship groups can change however there are strong relationships with family members in many cases.Adults have to adapt their behaviour to arrange their time and commitments between work roles and social groups. My client Sarah told me that she was healthy and fit as a young adult and that she didn’t have any physical problems while in the young stage of her adulthood life. Sarah needs glasses and her hair is now starting to go grey. She didn’t have any physical problems whilst she as in the middle aged stage of her adulthood. When Sarah left school she went to get a job in caring for the elderly. When she got in a job the company sent her for NVQ2 training.She didn’t have any problems with learning new skills for her job. While she was working within the company she was made a senior in the years that she was working for them. Sarah has family and friends relationships. She also went to work parties with her work friends. Her hobbies are reading and swimming. She settled down when she was 17 years of age and also had her first child at 17. Sarah thought that having a child at 17 was a bit difficult but she had family who was supporting her throughout her pregnant and labour and so she coped with it.Sarah doesnâ⠂¬â„¢t have much of a social life due to a child who is 1 year old. She said that some emotional effects are things such as getting old and that 2 of her children have now left home. She also has great relationships with her grandchildren and she also gets along with on her of her eldest children who have left home. Sarah doesn’t have much of a social life now but when it is possible and she has someone to look after her younger children, she goes out and visits older family member, family friends and also old work friends. Piaget – Sensorimotor stage – birth to 1 and half / 2 years old.A child will learn to use senses and muscles without learning language. * Babies are born without the ability to sense objects. * Babies are born with a range of primitive reflexes such as the sucking reflex allowing a baby to feed. * These reflexes lead to motor actions. * The sensorimotor stage is when thinking is limited to sensing objects and performing motor actions. * Piage t believed that a baby would not have a working system for remembering words and phrases until they were about 18 months old. | The pre-operational stage- 2-7 years old.A child will thinking in language without understanding meaning of lexis. * Pre-operational means pre-logical, during this stage Piaget believed children do not understand the lexis that they use. There is no reason to speak words as there is no understanding. * Children can communicate but not with a wide understanding of words and meanings. | The concrete operational stage- 7-11 years old. The child is within school age now and logical thinking is starting to be used within practical situations. * Children can understand logical terms and phrases to gain understanding of social situations. Use of language and social behaviour skills is varied due to the range of social situations the child is within on a daily basis. | The formal operational stage- 11+ years- thinking and using logic and abstract thought processes. * The child begins to behave like an adult within this stage. They are going through transitions in intellectual development and the process and transition of primary to secondary education. * With formal logical reasoning an adult can solve complex situations within their mind. Abstract thinking allows us to think within a sufficient manner to overcome barriers. |

Nursing Ethical Values and Definitions Essay

This essay will consider ethics in nursing, discuss values and morals and how dignity and respect in patient care is influenced; considering the importance of reflection and the implications it has on effective practice from the perspective of a student nurse. The scenario â€Å"Call Me Joe† provided by Nursing and Midwifery Council (NMC) (2010a) highlights concerning issues and bad practice that are happening in modern day nursing practice, and using the Driscoll and Teh (2001) reflective model: What, Now What and So What, to consider the care that Joe is receiving; considering how the nursing practice affects him directly and the implications of the nature of knowledge in nursing practice. Part of the way in which nursing practice is developed is through evidence based practice. Evidence based practice informs modern practice by using reliable, valid and relevant research and clinical experts to inform and improve nursing practice and patient care, enabling care that improves and makes a positive difference (Malloch & Porter-O’Grady 2010). It is through evidence based practice that pre-registration nurses are informed and trained and how professional development is maintained (Adams 2009). Nurses must use evidence to improve the standards of care to achieve higher standards in the nursing profession; evidence based practice improves the quality of nursing care guiding practice to ensure best practice is attained and is supported by literature and evidence (Brooker & Nicol 2003). It is evidence based practice that healthcare practitioners often draw upon to support clinically based reflections. Reflection is a process which enables healthcare professionals to improve practice through continuous monitoring (Daly et el 2010). Throughout the pre-registration nursing programme, the importance of reflection in practice is taught and is developed throughout, extending into post-registration to become a vital part of a nursing career and portfolio development. Reflection involves breaking down individual processes, considering what was successful, how practice can be enhanced and how this can be achieved; this also includes situations involving patient interaction and communication, enabling a greater understanding and an increase in self-awareness (Lundy & Janes 2009). By evaluating and reflecting, the practitioner is self-educating, improving clinical practice as well as their personal approach to nursing care that they provide; the main outcome of reflection in nursing is to improve and encourage best practice (Bulman & Schutz 2004). The Driscoll and Teh’s (2001) reflective model is made up of three parts, What, Now What and So What, and this model is appropriate to reflect upon the care that Joe is receiving as it enables the scenario to be deconstructed and analysed in detail to recognise and understand: What is wrong? So what are the implications? Now what can be done to resolve the situation? Using the model as an aid, the implications of unsatisfactory care and poor practice in the scenario can be explored and exploited to recognise that although there is a code of conduct produced by the NMC (2010b) that governs nurses, in some instances the care that is delivered fails to meet the expectations of the NMC, the patient and other professionals. WHAT?  From the scenario provided by the NMC (2010a) it is apparent that Joe lives in residential care, he is no longer able to care for himself so the decision for him to reside in the home was made; he is not unhappy about it, and feels lucky to live in there. Joe is a very proud man and until recent years was very able and self-caring. Since moving into the care home; Joe has begun to notice things about his environment, his carers and himself. Initially when Joe moved into the care home, he was mobile with a frame, as time has passed in the home Joe is no longer mobile and unable to get to toilet, reduced mobility can effect personal hygiene and toileting, but also social interactions and daily living (Brooker & Nicol 2003). Joe seems to accept his loss of mobility as part of the normal aging process; however from the scenario it is apparent that Joe now has a catheter, from which the bag does not get emptied regularly as Joe explains that it â€Å"pulls†. Joe does not complain and states â€Å"it’s just the way things are†; Joe has not recognised that he is suffering at the lack of competency of the care provider and that his needs are not being tended to and he is being neglected (Department of Health 2000). Joe then reminisces about his life before the care home; it becomes apparent that since moving into the home, Joe’s life has changed drastically; the things he used to enjoy prior to his admission are no longer considered or even talked about. He explains that when he first moved he filled in a form on which he stated his meal preferences; nevertheless this has not been acknowledged and each day Joe has porridge to eat and â€Å"lukewarm tea† to drink. This is not the only preference of Joe’s that is being overlooked. Joe explains that although his name is Joseph, he prefers to be called Joe; however it appears that the care providers do not recognise this and do not accommodate Joe’s choice, despite him requesting that they call him Joe on numerous occasions. Joe is being disrespected and his choices are not being honoured or considered; nurses should consider each patient as an individual and empathetically deliver the appropriate care (Lipe & Beasley 2004). Joe also remembers how he used to dress in his youth and through his life before entering the home. He implies he was a smart dresser and a well-kept man; even combing his hair. From Joe’s expression whilst sat, unshaven wearing his pyjamas which he implies are unclean and unchanged, it is clear that he does not feel that way anymore, he has accepted his life as it is now. He is unable to dress himself; he spends his time in his pyjamas and explains how the staff are always busy with the other residents. Joe has low self-esteem after losing his mobility and his independence, dignity and self-worth. Social role valorisation is where somebody is perceived by their role in society, a person may be deemed of value or devalue dependant on their role in society and this influences the way in which others behave towards them (Wolfensberger 2000). In social role valorisation Joe is considered to be of a lesser value, as he is elderly and can no longer care for himself, he has a low social status; this is reflected with in the scenario (NMC 2010a), Joes behaviour reflects that of little self-worth or respect, mirroring the way in which he has been treated. Through a lack of communication, it is clear that Joe feels lonely, he does not verbally communicate this but it is apparent that he feels this way: his facial expressions suggest he is unhappy, he frequently loses eye contact and sighs; frowning a lot. He is slumped in chair, his body language suggesting he lacks confidence and self-esteem. Communication is a means for a practitioner to build security and trust with a patient, begin to establish a therapeutic relationship in which important information is shared (Lloyd et al 2009), however the communication process has been ignored, Joe is uncertain of any boundaries devised, and does not want to appear as a nuisance and as a result of this he does not ask for things, voice his opinion or disclose his discomfort. Joe’s individual needs are not considered as he has minimal support in the home from staff and independence is not encouraged. Through the lack of assistance and promotion Joe has minimal mobility and is no longer able to maintain his lifestyle in a manner he deems appropriate. Nonetheless Joe is accepting of his new life; and is oblivious to the bad practice he is subjected to and the neglect he is incurring as a result. SO WHAT Ethics in nursing are centred on individual worth, respect for patients and autonomy. Individual morals impact upon ethics in nursing, considering what is right, wrong, good or bad. Morals are personal, so each individual has their own interpretation of what it right, wrong or acceptable (Rumbold 1999). The care that Joe is receiving is unacceptable, it is clear that the practitioners who provide the care either failed to consider the principles of ethics in nursing, or are influenced by ruthless morals. In nursing practice, what the nurse must and ought to do are defined by morals; the duties of a nurse involve moral and legal dimensions (Young et el 2009). Joe lacks independence, and the practitioners offer little support or opportunity to encourage and enable independence: promoting independence is an essential part of nursing practice (Alexander et el 2006); it enables the patient to feel of use and can build self-esteem, encouraging a patient to be actively involved in a task and enabling them to carry it out or assist the practitioner enables both physical and physiological independence to be achieved (Acello 2005). As a result of a lack of stimulation and social interaction, Joe has low self-esteem and little self-worth. All patients are individual and will have individual care needs. Care needs are patient specific, when providing care respect for the patient’s dignity should be anticipated, providing the patient information can help to relieve anxiety or confusion and honouring patients preferences can assist in delivering comfortable care (Gerdin et el 1997). Joe’s care is not specific to him, the care he is receiving is generalised, it is essential that the care provided is on an individual base: personalised to each patient’s specific needs (Kneedler & Dodge 1994). As a result of reduced mobility, Joe has a catheter in situ. Due to poor catheter care Joe is left in discomfort and at a higher risk of infection, all catheter bags should be emptied regularly to maintain infection control (Royal College of Nursing 2008). Joe is not considered as an individual person and his needs are not being tended to: nursing philosophy advocates patient centred care whereby the nurse establishes a rofessional relationship with the patient, treating them with dignity and respect, involving and empowering the patient allowing them to convey their needs and preferences, actively engaging the patient within their care and the decisions surrounding their care (Falvo 2011). Joe is not actively involved in his own care, he is tolerant of the care as he is lacking in dignity (NMC 2010a). It is apparent that within the home that there are issues of neglect and that Joe is the victim of neglect and possible abuse. The Department of Health (2000) describes abuse as â€Å"a violation of an individual’s human and civil rights by any other person or persons†. Joe’s individual needs are being neglected, he is suffering institutional abuse meaning that the care he is receiving is of a poor standard, and the practitioners lack in positive response to his complex needs, in the home there are rigid routines where individual needs are left unconsidered, and the practitioners with in the establishment lack knowledge (Department of Health 2000). NOW WHAT  Joe is a vulnerable adult; he is unable to take care of himself and is unable to protect himself against significant harm or exploitation (Department of Health 2000) and safeguards are necessary. Safeguarding consists of protecting and supporting vulnerable people and adults; the successful prevention of adult abuse and neglect depends on the service providers identifying and approaching the factors which contribute to the issues and result in neglect and abuse occurring, and tackling and dealing with these situations appropriately (The Association of Directors of Social Services 2005). Therefore to begin to tackle the issues raised in the scenario by the NMC (2010a) immediate positive action must be taken to assess the risks and increase the safety for the service users (The Association of Directors of Social Services 2005). Best practice as outlined by the NMC (2007) emphasises the importance of anti-discriminatory practice in promoting parity in patient care acknowledging the difference and the beliefs people have. Implementing this in the home would enable Joe to be treated as an individual and his needs and preferences accommodated. It is suggested that promoting independence in the elderly improves quality of life, and emotional wellbeing (Fisk 1986); if Joe’s independence was supported and encouraged he would become happier stable and able to continue with some level of independence and control over his life. Dignity is a human right protected by international law, all individuals are entitled to the right to life, free from torture and degrading treatment (Human Rights Act 1998) therefore Joe’s human rights, dignity and safety have been compromised. On entering the care home to protect Joe’s dignity, a care plan should have been put into place. A care plan outlines the care an individual needs; it identifies the actions the nurse must implement as per the nursing assessment (Carpetnito-Moyet 2009). Documentation should be clear and up to date (Department of Health 2010). Also a risk assessment should have been carried out to ensure Joe’s safety; recognising his mobility needs and if he is at risks of falls, reviewed and amended as necessary. Joe also needs a catheter care plan to monitor the progress of his catheter to ensure that is maintained correctly, changed regularly and to ensure that Joe is aware of personal hygiene and cleaning his catheter (Royal College of Nursing 2008). Joe’s food and fluid intake should also have been recorded to monitor his input, output and his weight, ensuring he was maintaining a healthy balance (Brooker & Nicol 2003). Having investigated, researched and reflected upon the scenario using the available material, the above should be the minimum requirement; Joe should be treated with respect, honouring his choice whilst maintaining dignity and encouraging independence for a better quality of life; whilst supporting him in establishing friendships and outside interests.

Climate Change Is Not A New Issue - 1552 Words

As stated in the previous section, climate change is not necessarily a new issue. However it’s been receiving the spotlight lately, as it should. The issue of the â€Å"Greenhouse Effect† has been around as early as 1820’s when scientist Jean Baptiste Joseph Fourier theorized that the Earth should be colder than it is. His main idea was that the Earth technically had a blanket around it, trapping in heat and keeping us as warm as we are. Once the idea that climate change was happening was more mainstream and not dismissed, another scientist picked up Fourier’s theory. He proposed the idea that carbon dioxide could be what was trapping the heat, and also that water vapor is good at trapping heat. Although, this did not explain why the Earth was so warm. The idea was again visited later on, but this time Svante Arrhenius discovered that a certain amount of carbon dioxide in the atmosphere equals a certain amount of warmth. 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