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Enterprise Risk Management ITS 835

Dr. Ronald Menold ronald.menold@ucumberlands.edu

Chapter 22 JAA Inc. A Case Study in Creating Value from Uncertainty

ITS 835

Introduction

▪ Business background

▪ Initial steps

▪ Evolution of Risk Management

▪ Introduction of ISO 31000 and HB 436 to JAA

▪ Bringing everything together

Business Background

▪ JAA 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 published by “Standards

Australia”

▪ 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

Chapter 22 JAA Inc. A Case Study in Creating Value from Uncertainty

ITS 835