Risk Management

Question 1

Two types of risk management standards

Answer 1

Internal = audit; measurement, due diligence and due process; guards against ignorance of largest risks

External = independent agencies; certification; best practice; protects against internal capture; PR

Question 2

Benefits of high risk management standards

Answer 2

Drive out poorly managed competitors
Adhere to any regulation
Important if you’re operating across jurisdictions
Creates well-defined metrics to adhere to
Common corporate culture
If involves tech means you’re well-resourced

Question 3

Risk registers - what do they measure?

Answer 3

Impact

Probability

Question 4

Case Study: Hyrdro One (?;?)

Answer 4

Mikes 2012
Canadian energy transmission and delivery company
Resource squeezes: Cost of production increasing and Ontario Government policy of energy conservation
Risks: Changes in the external environment
Driven by: Need to mobilise employees
& Toronto Stock Exchange required high-level strategic risk management
Phases of enterprise risk management:
1: risk workshops with employees – assess risks, create collective understanding, manager assigned risk-owner
2: Corporate Risk Profile: Discussed in 1-1 interviews between senior managers and Corporate Risk Officer
3: Appraisal and Planning: Risk-based approach to resource allocation; risk reduction per $ spent

Question 5

EMS in factories [?;?]

Answer 5

Florida and Davison 2001
Survey of manufacturing plants
Good for stakeholder relations - share info with communities etc.
Good for enviro risk - better enviro performance in the plant = reduced community enviro risk

Question 6

Environmental performance and financial performance [?;?]

Answer 6

Klassen and McLaughlin 1996
Environmental performance affects financial performance through market gains and cost savings
There are positive stock returns after positive environmental events and negative ones after environmental crises

Question 7

CSP and CFP [?;?]

Answer 7

Orlitzky, Schmidt and Rynes 2003
Meta-analysis - CSP and CFP were correlated across industries
They affect each other in a cycle
Government regulation unnecessary - it is inflexible vs. voluntary uptake is good