the chicken or the egg: a study of risk management and strategic planning presented by raven...
TRANSCRIPT
The Chicken or the Egg: A study of Risk Management and Strategic Planning
Presented by Raven Henderson
Raven Lane, LLC
Learning Objectives
Understand the relationship between Risk Management and Strategic Planning
Learn tools to apply internal and external risks in a strategic analysis to help build better strategic plans
Examine Enterprise Risk Frameworks, Strength, Weakness, Opportunity, and Treats (SWOT) techniques, and Risk Management concepts
What is Risk?
Identify Risk Events
What could go wrong?Who could we fail?Where are we vulnerable?What resources do we need to protect?What must go right for us to succeed?How could our operations be disrupted?How do we know if we are achieving our
objectives?
Identify Risk Events
What information must we rely on?What decisions require the most judgment?What activities are the most complex?What activities are regulated?What is our greatest legal exposure?How could someone convert assets?How successful will be at managing change?How will we retain critical resources?
What is Risk Management?
The Tools:
ERMSWOTRisk Management Concepts
COSO ERM
Enterprise risk management is a process, effected by an entity’s board of 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.
COSO ERM
SWOT Matrix Opportunities (External Analysis)
Threats (External Analysis)
Strengths (Internal Analysis)
SO StrategiesCapitalize on internal strengths to maximize opportunities.
ST StrategiesDraw on internal strengths to reduce external threats.
Weaknesses (Internal Analysis)
WO StrategiesOvercome internal weaknesses to maximize opportunities.
WT StrategiesReduce internal weaknesses to guard against external threats.
SWOT Analysis
Risk Management Checkpoints
Management Policy– Soundness, rationality, and integrity of policy
– Clarity and permeability of policy
– Understanding of risk management
– Basic strategy for risk management
– Diversification of risks
– Countermeasures for identified risks
Internal Control– Organization, delegation of authority, and reporting
– Separation of responsibilities
– Staff recruiting and training
Risk Management Checkpoints
Profit and Loss Management– Monitoring– Distribution of resources– Pricing– Competition
Compliance and Disclosure– Management understanding of legal compliance and
action to achieve it– Establishment and implementation of a framework– Actively disclose financial information and restraints
Contingency Plan
Words of Caution:
Don’t do these by yourselfDon’t use these for the next 10 yearsDon’t expect these to provide all the
answers
