Chapter
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
Five Key Changes to Practice the WHAT
The Responsibility for Learning
Evaluation Purpose and Process
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 Often?
PART 2 ERM Implementation at Leading Organizations
3 ERM at Mars, Incorporated: ERM for Strategy and Operations
2007 Operating Plan Workshops
4 Value and Risk: Enterprise Risk Management at Statoil
ERM at Statoil: A Brief History
ERM Processes in Statoil Today
Total Risk Optimization: Lessons Learned
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
ERM and the Center for Health Quality and Innovation
Protected Health Information Value Estimator (PHIve)
Reputational Repercussions
Legal and Regulatory Repercussions
Operational Repercussions
6 Strategic Risk Management at the LEGO Group: Integrating Strategy and Risk Management
LEGO Strategic Risk Management
Strategic Risk Management Lab Commentary
Enterprise Risk Management (Step 1)
Strategic Risk Management Lab Commentary
Monte Carlo Simulation (Step 2)
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)
Strategic Risk Management Lab Commentary
Stategic Risk Management Return on Investment
Strategic Risk Management Lab Commentary
7 Turning the Organizational Pyramid Upside Down: Ten Years of Evolution in Enterprise Risk Management at United Grain Growers
Background—Operating Environment
ERM/Integrated Risk Outcomes
ERM Credit Financing Outcomes
8 Housing Association Case Study of ERM in a Changing Marketplace
Risk Appetite Determination
Risk Assessment Methodology
Association A: London & Quadrant
Choices Made in 2012/2013
Association C: Ability Housing Association
Association D: GreenSquare
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
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
Philosophy of the Program
Compliance, Operations, and Finance Council (COFi)
Presidents Advisory Committee on ERM (PACERM)
Adopting and Adapting the COSO Model
Outcomes and Lessons Learned
What Next?: Current Priorities and Future Direction
10 Developing Accountability in Risk Management: The British Columbia Lottery Corporation Case Study
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
11 Starting from Scratch: The Evolution of ERM at the Workers’ Compensation Fund
Toward ERM Program Initiation
12 Measuring Performance at Intuit: A Value-Added Component in ERM Programs
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
13 TD Bank's Approach to an Enterprise Risk Management Program
Understanding an Organizations Risks Helps Reinforce the Risk Culture
Risk Governance Structure
Risk Identification, Assessment, and Reporting
Risk Monitoring and Reporting
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
Optimizing the Risk and Reward Balance 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
Working with External Stakeholders
Zurichs Proprietary Tools Used in ERM Framework
Total Risk Profiling Tool
Zurich Hazard Analysis Tool
Categorizing Various Risks at Zurich
Zurich Economic Capital Model
Analysis of Capital Adequacy
Zurichs Business Resilience Tools
How Zurich Uses Its ERM Tools to Create New Value
15 Embedding ERM into Strategic Planning at the City of Edmonton
ERM Development in the Past
Current Overall ERM Development
Links to Strategic Plan and to Other Strategic Tools
Selecting and Testing a Strategic Risk Management Model
Pilot pm2 Risk Scorecard Methodology
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
Findings on the Process of Selecting and Implementing a Framework
Appendix: Summary of THE WAY AHEAD, Edmontons Strategic Plan
16 Leveraging ERM to Practice Strategic Risk Management
ERM: A Reexamination of Purpose
Leveraging ERM to Practice Strategic Risk Management
Managing and Measuring Value Creation
Risk Management Fault Line
Additional Tools and Techniques
PART 4 Specialized Aspects of Risk Management
17 Developing a Strategic Risk Plan for the Hope City Police Service
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
Community Views on Police Issues
Major Competitive Factors
Blue Wood Financial Performance
Appendix I: Blue Wood Chocolates
Appendix II: The Hershey Company
Appendix III: Rocky Mountain Chocolate Factory, Inc.
19 Kilgore Custom Milling
The Financial Risk Management Meeting
20 Implementing Risk Management within Middle Eastern Oil and Gas Companies
MECO Risk Management Background
Risk Management Practices within MECO
Environmental Protection Department
Risk Management Information Gathering Exercise (January 2010 to June 2011)
Management Committee Meeting, December 2011
Operational Excellence, June 2012 to December 2012
Risk Management Move to Corporate Planning, December 2012 to Present
21 The Role of Root Cause Analysis in Public Safety ERM Programs
Getting to the Root of the Problem
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
Case Study Example: Tackling Violent Crime
Case Facts: General Background
22 JAA Inc.—A Case Study in Creating Value from Uncertainty: Best Practices in Managing Risk
Initial Steps: Strategic Planning and Business Objectives
Establishing the Governance System
Evolution of Risk Management
Introduction of ISO 31000 and HB 436 to the Company
Defining the Context of JAA
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
Objectives of Risk Management
Risk Oversight Principles
Roles and Responsibilities
Risk Management Methodology
General Risk Management Policies
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
Part Two: Outcome and Lessons Learned
24 The Role of VaR in Enterprise Risk Management: Calculating Value at Risk for Portfolios Held by the Vane Mallory Investment Bank
Risk and Value at Risk Overview
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
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
Case Study General Findings
Intended Uses for Our Approach
Modern Portfolio Concerns Contained in the Framework
Consideration of Behavioral Concerns inStructure
PART 5 Mini-Cases on ERM and Risk
28 The Reluctant General Counsel
29 Transforming Risk Management at Akawini Copper
The Acquisition and Due Diligence
The Transformation Process
Gaining Senior Management Ownership for Transformation
30 Alleged Corruption at Chessfield: Corporate Governance and the Risk Oversight Role of the Board of Directors
Chessfield Inc. and Its Board of Directors
Message from the CEO Requesting to Meet the Author
Governance Documents, Interviews, and On-Site Observation Requested by the Author
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
31 Operational Risk Management Case Study: Bon Boulangerie
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 That Failed
Successful Firms: JPMorgan Chase, Goldman Sachs, Wells Fargo, and TD Bank
Toronto Dominion Bank (TD Bank)
Firms That Failed to Navigate the Crisis
JPMorgan Chase after the Crisis: The Perils of Hubris
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 Creates Inefficient Management”
Who Is Getting Management Buy-In for ERM?
Specific Challenges and Obstacles Observed in Risk Management
Risk Management Frameworks
Organizational Placement of ERM
The Influence of the Size of Organizations
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
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
War Gaming and Scenario Planning
35 ERM at Malaysia's Media Company Astro: Quickly Implementing ERM and Using It to Assess the Risk-Adjusted Performance of a Portfolio of Acquired Foreign Companies
Corporate Governance in Malaysia
Enterprise Risk Management at Astro
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
Implementing Enterprise Risk Management
：Case Studies and Best Practices
( Robert W. Kolb Series )
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