The value of data for business decisions in opaque information environments
For those charged with risk management decisions in complex environments like Libya, Nigeria, or Yemen, the amount of data available to drive policy is often lacking. But business decisions in even the most opaque information environments can be shaped by data. When Navanti incorporates tactical-level data (concerning the threat environment, industry infrastructure, and transit networks) with business data, like share and commodity prices, this combination can be leveraged to provide high-confidence insight to companies.
Navanti put this concept into practice for the board of directors for a large oil and gas corporation as they were conducting their due diligence into investment opportunities in southeastern Nigeria. Militant groups had long targeted the assets and transit routes being assessed in the due diligence. The firm needed to understand their Duty of Care responsibilities, and, more broadly, how entering this market would impact shareholders. Navanti was retained as part of the due diligence process to provide a briefing on the foreseeable threats, risk management measures, and an assessment of likely outcomes.
Specifically, Navanti conducted a quantitative study on the potential impact of insurgent attacks on the company, shareholder value, and the value of commodities. To do this, Navanti leveraged its database of militant attacks and developed data sets for publicly traded assets. Analysts conducted regression analyses to quantify asset price volatility in the period immediately following various types of militant attacks.
The final analysis incorporated guidance on investment concentration in Nigeria versus other countries, specific areas for risk mitigation in the country plan, and a risk forecast. The specificity of this analysis not only provided confidence to the decision makers in the board of directors, but it also detailed a roadmap for the country team as the project began post acquisition.