EnterpriseRiskManagement discussion

ITS 835 Chapters 26, 27, 28, 29

Mini-Cases on ERM and RIsk Enterprise Risk Management

Professor Michael Solomon

Overview

• Collection of four mini-cases • Leaves open ended questions • Presents real life situations

• And needs for ERM

• Mini-Cases • Bim Consultants Inc.

• Nerds Galore

• The Reluctant General Counsel

• Transforming Risk Management at Akawini Copper

Bim Consultants Inc.

• Consulting firm • 10 offices in Canada

• 3,000 staff

• 30 partners

• “Customers are number one” • But revenue is stagnant

• Opportunity to buy out competitor • Purchase would double size and sales

• Negotiations must be kept confidential

Nerds Galore

• Canadian IT service company • 12 offices

• 1,000 employees

• Grew from founder’s garage

• Shift from small start-ups to medium size customers • High turnover of 20% is causing concern • Decreasing customer satisfaction

• Steady revenue (for now)

Nerds Galore, cont’d.

• Strategy from new HR VP • Attract the best talent • Retain good people • Manage talent • Optimize the use of people • Rely on outsourcers

• Executive team workshop to explore HR risks • Inability to recruit people with needed skills • Loss of staff with key internal knowledge • Uncompetitive labor production • Increased departures of skilled technical staff • Loss of key business know-how

The Reluctant General Counsel

• Business Software Corporation (BSC) • Silicon Valley, CA • Annual revenue over $1 billion

• Board wants ERM • Upper management supports establishing ERM

• EVP of development and general counsel • Doesn’t want to be involved in ERM • Risk discussions could be discoverable in lawsuits • U.S. Securities and Exchange Commission (SEC)

• Requires disclosure of risks • Recommendation is to not formally pursue ERM

Transforming Risk Management at Akawini Copper

• Akawini Copper • Mining company acquired by larger United Minerals

• Single mine and plant

• $774 million in revenue

• 1,500 employees

• United Minerals implemented ISO 31000 framework • Substantially more sophisticated than Akawini’s RM

• Launched project to transform Akawini RM to ERM