erm implementation
Chapter22
JAA Inc. – A Case Study in Creating Value from Uncertainty
Introduction
Business Background
Initial Steps
Evolution of Risk Management
Introduction of ISO 31000 and HB 436
Bringing Everything Together
Background
JSS is a clothing wholesaler and retailer
Founded in 1972
Went public in 1998
It has three operating segments:
US wholesale
US retail
International (both wholesale and retail)
It has 57 retail stores in 10 countries
Initial Steps
Strategic objectives
Maintain market leadership
Sustain technology leadership
Strengthen global presence
Deliver quality service
Become a leader in compliance with laws and regulations
Establish a governance system
Multiple committees with specific responsibilities
Governance and framework
Executive Risk Oversight
Responsible for managing risk and implementing internal controls
Internal Audit
Risk Management
Compliance Monitoring
Board & Board
Committees
Executive
Functions
Control
Functions
Business
Functions
Main Board
Risk and Strategy Committee
Audit Committee
Compensation and Nomination Committee
Evolution of Risk Management
Lack of strategic risk management led to many issues
Communication
Missed opportunities
Lack of commitment to objectives
Poor quality
Identified gaps in risk management
Engaged in aggressive internal training
Soft skills
Team building
Management planning
Introduction to ISO 31000 and HB 436
JAA adopted ISO 31000
HB 436 provided extensive implementation guidance
ISO 31000 was an upgrade of the framework JAA was using
ISO 31000 framework formalized ERM of JAA
Defined organization and process
Using Context of Risk Criteria
Bringing Everything Together
Risk Map
Risk Attitude