Discussion on ERM

ITS 835 Chapter 22

JAA Inc. – A Case Study in Creating Value from Uncertainty Enterprise Risk Management

Dr. Les Stovall

Introduction

• Business background • Initial steps • Evolution of Risk Management • Introduction of ISO 31000 and HB 436 to JAA • Bringing everything together

Business Background

• JSS is a clothing wholesaler and retailer • Founded in 1972 • Went public in 1998 • Three operating segments

• U.S. wholesale

• U.S. retail

• International (wholesale and retail)

• 57 retail stores in 10 countries

Initial Steps

• Strategic objectives • Maintain market leadership

• Sustain technology leadership

• Strengthen global presence

• Deliver quality service

• A leader in compliance with all laws and regulations

• Establish a governance system • Multiple committees, each with specific responsibilities

Governance Framework

Evolution of Risk Management

• Lack of strategic risk management led to many problems • Communication • Missed/lost opportunities • Lack of commitment to objectives • Declining quality

• Identified gaps in risk management • Engaged in aggressive internal training

• Soft skills • Team building • Management planning

Introductions of ISO 31000 and HB 436

• JAA adopted ISO 31000 • HB 436 provided extensive implementation guidance

• ISO 31000 was basically an upgrade of the framework JAA was already using

• ISO 31000 framework formalized JAA’s ERM • Defined organization and process

Using Context for Risk Criteria

Bringing Everything Together

Risk Map

Risk Atitude