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• IMPLEMENTING ENTERPRISE RISK MANAGEMENT
• Contents
• Foreword
• 1 Enterprise Risk Management Case Studies: An Introduction and Overview
• The Evolution of Enterprise Risk Management
• Why the Need for a Book with ERM Case Studies?
• Summary of the Book Chapters
• Part I: Overview and Insights for Teaching ERM
• Part II: ERM Implementation at Leading Organizations
• Part III: Linking ERM to Strategy and Strategic Risk Management
• Part IV: Specialized Aspects of Risk Management
• Part V: Mini-Cases on ERM and Risk
• Part VI: Other Case Studies
• Conclusion
• Notes
• References
• About the Editors
• PART 1 Overview and Insights for Teaching ERM
• 2 An Innovative Method to Teaching Enterprise Risk Management: A Learner-Centered Teaching Approach
• Learner-Centered Teaching: The WHY
• Learner-Centered Teaching
• Why LCT?
• Five Key Changes to Practice the WHAT
• The Balance of Power
• The Function of Content
• The Role of the Teacher
• The Responsibility for Learning
• Evaluation Purpose and Process
• Conclusion
• Questions
• Appendix: LCT ERM Examples from the HOW
• Example #1. Chapter : A Brief History of Risk Management
• Example #2. Chapter : ERM and Its Role in Strategic Planning and Strategy Execution
• Example #3. Chapter : Becoming the Lamp Bearer—The Emerging Roles of the Chief Risk Officer
• Example #4. Chapter : Identifying and Communicating Key Risk Indicators
• Example #5. Chapter : How to Prepare a Risk Profile
• Example #6. Chapter : Quantitative Risk Assessment in ERM
• Example #7. Chapter : Market Risk Management/Credit Risk Management
• Example #8. Chapter : Operational Risk Management
• Example #9. Chapter : Types of Risk
• Example #10. Chapter : Managing Financial Risk
• Example #11. Chapter : Bank Capital Regulation and Enterprise Risk Management
• Example #12. Chapter : Legal Risk Post-SOX and the Subprime Fiasco
• Example #13. Chapter : Academic Research on Enterprise Risk Management
• Example #14. Chapter : How to Plan and Run a Risk Management Workshop; Chapter: Who Reads What Most
• References
• About the Contributors
• PART 2 ERM Implementation at Leading Organizations
• 3 ERM at Mars, Incorporated: ERM for Strategy and Operations
• Mars ERM History
• Failure and Retrenchment
• Phase 2—Success
• Global Rollout
• Reporting
• 2007 Operating Plan Workshops
• Technology
• Aggregation
• Template Evolution
• Special Situations
• Major Acquisition
• Conclusion
• Questions
• Note
• About the Contributor
• 4 Value and Risk: Enterprise Risk Management at Statoil
• ERM at Statoil: A Brief History
• ERM Foundations
• ERM Processes in Statoil Today
• Optimizing Total Risk
• Total Risk Optimization: Lessons Learned
• Risk Aggregation
• The Frontiers
• Conclusion
• Questions
• Notes
• References
• About the Contributors
• 5 ERM in Practice at the University of California Health System:
• The Enterprise Risk Management Program
• Leveraging Technology to Support ERM
• Creating a Risk-Aware Culture
• Health System Specialized Programs
• Premium Rebate Program
• ERM and the Center for Health Quality and Innovation
• Protected Health Information Value Estimator (PHIve)
• Reputational Repercussions
• Financial Repercussions
• Legal and Regulatory Repercussions
• Operational Repercussions
• Clinical Repercussions
• Total the Impacts
• ERM and Strategy
• Questions
• Notes
• About the Contributor
• 6 Strategic Risk Management at the LEGO Group: Integrating Strategy and Risk Management
• About the LEGO Group
• The LEGO Group Strategy
• LEGO Strategic Risk Management
• Strategic Risk Management Lab Commentary
• Enterprise Risk Management (Step 1)
• Strategic Risk Management Lab Commentary
• Monte Carlo Simulation (Step 2)
• Risk Tolerance
• Strategic Risk Management Lab Commentary
• AROP: Active Risk Assessment of Business Projects (Step 3)
• Common Language and Common Framework
• Strategic Risk Management Lab Commentary
• Preparing for Uncertainty: Defining and Testing Strategies (Step 4)
• Four Strategic Scenarios
• The PAPA Model
• Strategic Risk Management Lab Commentary
• Stategic Risk Management Return on Investment
• Strategic Risk Management Lab Commentary
• Conclusion
• Questions
• Notes
• References
• About the Contributors
• 7 Turning the Organizational Pyramid Upside Down: Ten Years of Evolution in Enterprise Risk Manageme
• Background—Operating Environment
• Governance
• Leadership
• ERM/Integrated Risk Outcomes
• ERM Credit Financing Outcomes
• Agricore United
• Harvesting Value
• Conclusion
• Questions
• Acknowledgments
• Notes
• About the Contributor
• 8 Housing Association Case Study of ERM in a Changing Marketplace
• Background
• Sector Issues
• Charitable Status
• Sector Risks
• Some Useful Methodology
• Risk Appetite Determination
• Risk Assessment Methodology
• Four Associations
• Association A: London & Quadrant
• Mission Statement
• Perceived Risks
• Choices Made in 2012/2013
• Association B: RCT Homes
• The RCT Subsidiaries
• Perceived Risks
• Association C: Ability Housing Association
• Perceived Risks
• Association D: GreenSquare
• Objectives and Strategy
• Questions
• Notes
• References
• About the Contributor
• 9 Lessons from the Academy: ERM Implementation in the University Setting
• The Higher Education Environment
• Organizational Type Impacts Institutional Culture
• Risks Affecting Higher Education
• Emergence of ERM in Higher Education
• Adopting and Implementing ERM in Colleges and Universities
• The University of Washington: A Journey of Discovery
• Institutional Profile
• Culture at UW
• Implementation History at UW
• Leadership from the Top: President Outlines the Charge
• Advisory Committee Recommendations: Create a Culture-Specific ERM Program
• Scope of the Risk Framework
• Organizational Structure
• Philosophy of the Program
• Evolution of ERM at UW
• ERM Structure at UW
• UW Units
• ERM Program Staff
• Compliance, Operations, and Finance Council (COFi)
• Presidents Advisory Committee on ERM (PACERM)
• Internal Audit
• UW President and Provost
• UWs ERM Model
• Adopting and Adapting the COSO Model
• Tools and Techniques
• Outcomes and Lessons Learned
• What Next?: Current Priorities and Future Direction
• Conclusion
• Questions
• Notes
• References
• About the Contributor
• 10 Developing Accountability in Risk Management: The British Columbia Lottery Corporation Case Study
• Background
• The Beginnings of the Risk Management Journey
• Learning from the First ERM Initiative
• Restarting the Program–2006–2008
• Key Steps in the Development of the ERM Program
• Revitalizing the ERM Program—2009–2010
• Strengthening the Program—2010–2013
• Building the Risk Profile
• The Role of Risk Managers, Champions, and Committees
• Developing a More Sophisticated Approach to Risk Analysis and Evaluation
• Conclusion
• Questions
• Notes
• References
• About the Contributor
• 11 Starting from Scratch: The Evolution of ERM at the Workers’ Compensation Fund
• Toward ERM Program Initiation
• Initial Actions
• Maturing: Years 1 and 2
• The Future
• Questions
• Notes
• About the Contributor
• 12 Measuring Performance at Intuit: A Value-Added Component in ERM Programs
• Intuits ERM Journey
• ERM Maturity Model
• Benefits of Measuring Performance in ERM Programs
• Using Key Performance Indicators to Measure Risk Management Effectiveness
• Analyzing Performance Data
• Using Key Risk Indicators to Understand Potential New Risks or Changing Risks
• ERM Performance Measurement and Reporting at Intuit
• First Evolution: ERM Process Adoption
• Second Evolution: Risk Mitigation Progress Measurement
• Third Evolution: Multidimensional Risk Management Performance Measurement
• Conclusion
• Questions
• About the Contributor
• 13 TD Bank’s Approach to an Enterprise Risk Management Program
• Background
• ERM at TD Bank
• Understanding an Organizations Risks Helps Reinforce the Risk Culture
• Risk Governance Structure
• Risk Identification, Assessment, and Reporting
• Risk Measurement
• Risk Control
• Risk Monitoring and Reporting
• Conclusion
• Questions
• References
• About the Contributors
• PART 3 Linking ERM to Strategy and Strategic Risk Management
• 14 A Strategic Approach to Enterprise Risk Management at Zurich Insurance Group
• Enterprise Risk Management at Zurich
• Tangible Results
• Optimizing the Risk and Reward Balance at Zurich
• Risk Culture at Zurich
• Zurich Groups Enterprise Risk Management Framework
• Risk Governance Approach at Zurich with Three Lines of Defense
• Integrated Assessment and Assurance
• Internal Control Framework
• Role of the Chief Risk Officer and Group Risk Management at Zurich
• Board-Level Risk Committee and Executive Risk Committee Responsibilities
• Emerging Risk Group
• Working with External Stakeholders
• Zurichs Proprietary Tools Used in ERM Framework
• Total Risk Profiling Tool
• Zurich Hazard Analysis Tool
• Zurichs Risk Room
• Categorizing Various Risks at Zurich
• Strategic Risks
• Insurance Risks
• Market Risks
• Credit Risks
• Liquidity Risks
• Operational Risks
• Reputation Risks
• Capital Management
• Zurich Economic Capital Model
• Analysis of Capital Adequacy
• Zurichs Business Resilience Tools
• How Zurich Uses Its ERM Tools to Create New Value
• Conclusion
• Appendix
• Questions
• References
• About the Contributors
• 15 Embedding ERM into Strategic Planning at the City of Edmonton
• Context—City of Edmonton
• City Government
• ERM Development in the Past
• City Auditors Report
• Current Overall ERM Development
• Links to Strategic Plan and to Other Strategic Tools
• Results-Based Budgeting
• Capital Budgeting Models
• Selecting and Testing a Strategic Risk Management Model
• Pilot pm2 Risk Scorecard Methodology
• Initial Planning
• Step 1: Identify Strategy
• Step 2: Identify Key Risk Elements
• Step 3: Score Risk Elements
• Step 4: Link Programs, Initiatives, and Risks
• Step 5: Determine Indicators and Mitigation Actions
• Selecting an ERM Framework
• Comparison of pm2 and ISO 31000 Frameworks
• Recommended Strategic ERM Model
• Lessons Learned
• Key Success Factors
• Findings on the Process of Selecting and Implementing a Framework
• Conclusion
• Appendix: Summary of THE WAY AHEAD, Edmontons Strategic Plan
• Questions
• Notes
• About the Contributor
• 16 Leveraging ERM to Practice Strategic Risk Management
• ERM: A Reexamination of Purpose
• Regulatory Environment
• Leveraging ERM to Practice Strategic Risk Management
• Managing and Measuring Value Creation
• Risk Management Fault Line
• Value Maps
• Additional Tools and Techniques
• Conclusion
• Questions
• Notes
• About the Contributors
• PART 4 Specialized Aspects of Risk Management
• 17 Developing a Strategic Risk Plan for the Hope City Police Service
• The Context
• Some Background on the Hope City Police Service
• What the Consultant Heard
• Chief Administrative Officer of the City
• Chair of Police Service Board
• Interviews within the Police Service
• President of the Police Association
• Chair of Hope City Chamber of Commerce
• Editor of the Hope City Telegraph
• Citizens against Racism Community Group
• East End Residents Association
• Hope City Citizens for Responsible Government
• Other Input
• Community Views on Police Issues
• Questions
• Notes
• About the Contributor
• 18 Blue Wood Chocolates
• Background
• The Company
• Market Overview
• Major Competitive Factors
• Cocoa Markets Overview
• Sugar Markets Overview
• Milk Markets Overview
• Blue Wood Financial Performance
• Conclusion
• Appendix I: Blue Wood Chocolates
• Appendix II: The Hershey Company
• Appendix III: Rocky Mountain Chocolate Factory, Inc.
• Questions
• Notes
• About the Contributors
• 19 Kilgore Custom Milling
• Background
• Kilgore Custom Milling
• The Management Team
• The Company
• The New Contract
• The Financial Risk Management Meeting
• Questions
• About the Contributors
• 20 Implementing Risk Management within Middle Eastern Oil and Gas Companies
• Company Background
• Organization Culture
• Local Culture
• MECO Structure
• MECO Risk Management Background
• Risk Management Practices within MECO
• Information Technology
• Project Management
• Finance
• Environmental Protection Department
• Law
• Corporate Risk Exercise
• Risk Management Information Gathering Exercise (January 2010 to June 2011)
• Consolidation
• Risk Framework
• Risk Management Approach
• Management Committee Meeting, December 2011
• Operational Excellence, June 2012 to December 2012
• Risk Management Move to Corporate Planning, December 2012 to Present
• Conclusion
• Questions
• Notes
• About the Contributor
• 21 The Role of Root Cause Analysis in Public Safety ERM Programs
• Policing and Risk
• Getting to the Root of the Problem
• Five Whys Analysis
• Cause and Effect Analysis
• Example: Cause and Effect Analysis on Homelessness and the Criminal Justice System
• Failure Mode, Effects, and Criticality Analysis
• FMECA Example 1: Engineering Process
• FMECA Example 2: Operational Tactics Review Process
• Force Field Analysis
• Influence Diagrams
• Comparing RCA Tools
• Concept Fans
• Case Study Example: Tackling Violent Crime
• Case Facts: General Background
• Specific Issue
• Developing the Approach
• Understanding the Issues
• The FMECA Process
• Bringing It All Together
• Conclusion
• Questions
• Notes
• References
• About the Contributor
• 22 JAA Inc.—A Case Study in Creating Value from Uncertainty: Best Practices in Managing Risk
• Setting the Context
• Business Background
• Initial Steps: Strategic Planning and Business Objectives
• Establishing the Governance System
• Business Operations
• External Auditors
• Evolution of Risk Management
• Introduction of ISO 31000 and HB 436 to the Company
• Defining the Context of JAA
• Defining Risk Criteria
• Bringing Everything Together
• Moving Forward: Overseeing Strategy and Risks
• Looking to the Future: JAAs Management of Uncertainty
• Appendix A: JAA Inc. Financial Statements
• Appendix B: Risk Management Policy
• Purpose
• Scope
• Objectives of Risk Management
• Terminology
• Risk Oversight Principles
• Roles and Responsibilities
• Risk Management Methodology
• General Risk Management Policies
• Part A – Questions
• Part B – Questions
• Notes
• References
• About the Contributors
• 23 Control Complacency: Rogue Trading at Société Générale
• Part One: Kerviels Trial—A Media Circus
• Société Générale—The Rise of Trading
• From Business to Retail to Investment Banking, from Private to Public to State Ownership
• CIB Gets a Boost from Trading Talent
• Société Générale Group Snapshot, December 2006
• Jérôme Kerviel, an Ambitious Outsider
• At First a Few Side Bets, Then Massive Speculation
• Discovery, Damage Control, and Retribution
• Postmortem
• Managerial Supervision
• Control Environment
• System Reliability
• Risk-Sensitive Culture
• Who Was to Blame?
• Exercise
• Part Two: Outcome and Lessons Learned
• What Actually Happened
• Questions
• References
• About the Contributor
• 24 The Role of VaR in Enterprise Risk Management: Calculating Value at Risk for Portfolios Held by t
• Risk and Value at Risk Overview
• Value at Risk
• History, Characteristics, and Assumptions of VaR
• Advantages and Criticisms of VaR
• Calculating Value at Risk
• Your Task: Calculating Portfolio VaR for Vane Mallory
• Portfolio 1: Energy Commodities
• Portfolio 2: Equities
• Conclusion
• Questions
• Notes
• References
• About the Contributors
• 25 Uses of Efficient Frontier Analysis in Strategic Risk Management: A Technical Examination
• Strategic Risk Management Framework Examined
• Modern Portfolio Theory as a Foundation for Efficient Frontier Analysis
• Practical Applications of Risk Measurement for Insurance
• Modern Portfolio Theory (MPT)
• Efficient Frontier Insurance Framework
• Sample Case Study
• Case Study General Findings
• Intended Uses for Our Approach
• Modern Portfolio Concerns Contained in the Framework
• Consideration of Behavioral Concerns inStructure
• Questions
• Acknowledgments
• Notes
• References
• About the Contributors
• PART 5 Mini-Cases on ERM and Risk
• 26 Bim Consultants Inc.
• Questions
• About the Contributor
• 27 Nerds Galore
• Questions
• About the Contributor
• 28 The Reluctant General Counsel
• Questions
• About the Contributor
• 29 Transforming Risk Management at Akawini Copper
• The Acquisition and Due Diligence
• The Transformation Process
• Gaining Senior Management Ownership for Transformation
• The Transformation Plan
• Questions
• Notes
• Reference
• About the Contributor
• 30 Alleged Corruption at Chessfield: Corporate Governance and the Risk Oversight Role of the Board o
• Chessfield Inc. and Its Board of Directors
• Whistle-Blower Complaint
• Message from the CEO Requesting to Meet the Author
• Governance Documents, Interviews, and On-Site Observation Requested by the Author
• Document Review
• Interview Data
• CEO Compensation Issue
• Risk Management
• Self-Dealing Issue
• Board Composition
• Preparation of the Authors Report and Communication with the Regulator
• Chessfield Board Meeting to Discuss the Authors Recommendations
• Two Contentious Recommendations
• Recommending a Woman to Serve on the Board
• Conclusion
• Questions
• Notes
• References
• About the Contributor
• 31 Operational Risk Management Case Study: Bon Boulangerie
• Question
• About the Contributor
• PART 6 Other Case Studies
• 32 Constructive Dialogue and ERM: Lessons from the Financial Crisis
• Constructive Dialogue: The Essential Difference between Firms That Navigated the Crisis and Those Th
• Successful Firms: JPMorgan Chase, Goldman Sachs, Wells Fargo, and TD Bank
• JPMorgan Chase
• Goldman Sachs
• Wells Fargo
• Toronto Dominion Bank (TD Bank)
• Firms That Failed to Navigate the Crisis
• JPMorgan Chase after the Crisis: The Perils of Hubris
• Conclusion
• Questions
• Notes
• About the Contributor
• 33 Challenges and Obstacles of ERM Implementation in Poland
• Methodology to Diagnose the Status of ERM Implementation
• Main Issues in Polands ERM Implementation
• Board Perception of ERM: “We Have to Change the Way We Run the Business, Because Lack of ERM Creat
• Who Is Getting Management Buy-In for ERM?
• Specific Challenges and Obstacles Observed in Risk Management
• Terminology
• Principles
• Risk Management Frameworks
• Risk Owners
• Organizational Placement of ERM
• The Influence of the Size of Organizations
• Risk Management Process
• We Have to Build the Chief Risk Officer Risk Manager Profession from Scratch
• What Numbers Say about ERM Maturity
• Risk Management Framework—Accountability
• Impact of the Risk Assessment Tools on the Performance of the Companies
• Capital Allocation: A Frequently Missed Part of the ERM Framework and Risk Treatment
• Conclusion
• Questions
• Notes
• References
• About the Contributors
• 34 Turning Crisis into Opportunity: Building an ERM Program at General Motors
• Background and Implementation
• General Motors’ Approach to Enterprise Risk Management
• Lessons Learned: Identifying Risks
• Lessons Learned: Developing Top Risks Lists and Reporting to Senior Management
• Lessons Learned: Understanding Corporate Culture
• Lessons Learned: Strategic Risk Mitigation and Decision Support
• Game Theory
• War Gaming and Scenario Planning
• Looking Forward
• Conclusion
• Questions
• Notes
• About the Contributors
• 35 ERM at Malaysia’s Media Company Astro: Quickly Implementing ERM and Using It to Assess the Risk-A
• Malaysia
• The Astro Group
• Corporate Governance in Malaysia
• Enterprise Risk Management at Astro
• Astro Overseas Limited
• Evolution of ERM at AOL
• Role of ERM in the Acquisition Process
• The Monitor and Review Step—Focus of AOLs ERM
• Risk Profile: Risk Map and Action Plans
• The Investment Performance Dashboard
• Helping the Board Make Investment Decisions
• Conclusion
• Questions
• Notes
• References
• About the Contributors
• About the Editors
• Index
• EULA