risk management 3

ITS 835 Chapter 22

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

Professor Michael Solomon

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