Академический Документы
Профессиональный Документы
Культура Документы
Bates Richmond, Director of Risk Management, Texas Instruments JT Fisher, CFO, Austin Industries Jeff Fritts, SVP, Willis Group
Risk Mitigation
Financing Risk Control Operational Separation Segregation Avoidance Contractual
Loss Mitigation
Claims Management Secondary Impact Management
Stuff Happens!
ERM
ERM Components: Corporate Tone: philosophy, integrity and ethics Risk Strategy, risk appetite & risk tolerance Entity Units: Differentiates risk and opportunities Potential events might impact objectives Evaluates cost/benefit of potential risk responses
Review Effectiveness
- Periodically -Internal Audit
Assess Risks
- Identify - Evaluate - Prioritize
HAZARD
Lawsuits Lawsuits that are not related to accounting practices Natural Disaster Act of God and other natural phenomena
FINANCIAL
Foreign Macro-economic Changes in foreign interest rates and/or currency exchange rates which affects a companys earnings High input commodity price Significant increase in commodity price of a major input causing an earnings decrease Interest rate fluctuation - Changes in interest rates negatively affect companys earnings
OPERATIONAL
Accounting irregularities Misrepresentation of financial statements and/or fraud Cost overruns Higher than expected overhead or other operating costs, extraordinary charges, and/or heavy investment Ineffective Management Poor operating decisions made by executives within the company leading to an earnings shortfall Supply chain issues Problems with the inventory and delivery systems leading to revenue shortfalls or cost overruns
STRATEGIC
Competitive pressure Loss of revenue due to pricing and/or volume pressures from competitors Customer demand shortfall Lower than expected industry-wide demand from customers Customer pricing pressure Strong customers negotiate price discounts Loss of key customer Loss or major reduction of business from key customers Misaligned Products/Channels Product selection/design does not meet customer requirements M&A integration problems M&A activities viewed unsound by investors; cost savings and/or synergies from M&A not achieved Regulatory problems Regulatory changes affect long-term earnings potential R&D Delays Problems with research and development Supplier Problems Suppliers oppose companys strategy
Impact
Remote
Unlikely
Possible
Likely
Almost Certain
Probability
10
HIGH
MEDIUM
Declaration under SEC Form 8K required and likely merits a press statement to be available to reporters upon request and possible calls to key stakeholders. Below SEC Form 8K filing requirement, but may merit a press statement to be available to reporters and key stakeholders upon request
LOW
ERM Definitions
COSO (2004)
Enterprise risk management is a process, effected by an entitys board if directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.
The amount of E risks already within your business describes your Erisk tolerance What is the smallest $ size of risk event could cripple or kill your organization? How many of risks of that size or larger already exist in your business today? a (sizes of those) x b (number of those) = your real risk tolerance
Customer/Business Diversification
Trading (commodity, currency)
Training
Emergency/Conting ency Planning
Feedback to RM Process-Identification
Identify Risks - Enterprise Risks
- Operational Risks
Review Effectiveness
- Periodically -Internal Audit
Assess Risks
- Identify - Evaluate - Prioritize
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