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Risk Management at AECOMECRI Meeting - Amsterdam - November 2016
GOLDEN 1 CENTER
United States
Anticipated to be completed later this year, Golden 1 Center
will be the world’s most comfortable, connected and
sustainable sports venue.
the Design. Build. Finance. Operate Vision.
Project images (from top left): Rio Olympic & Paralympic Games, Brazil; Istanbul New Airport, Turkey; Olmsted Dam, PA, U.S.; Unmanned Aerial Systems Operation Center Support; Halley VI, Antarctica; Barclays Center, NY, U.S.; Taizhou Bridge, China; Spaceport America, NM, U.S.
7 continents
92k employees
150+ countries
#156 Fortune 500
$18b revenue (2016)
$38b backlog
$5b market cap
NYSE:ACM ticker
• Leading fully integrated infrastructure services firm
• Consistently ranked #1 in key categories, including U.S. and global design
• Executing the world’s most complex and iconic projects
Vision: Leading Fully Integrated Infrastructure Services Firm
DBFO Delivers Differentiated Value For Our Clients
AECOM Integrated Delivery Design / Build Public-Private
Partnerships
• Our unique DBFO capabilities, enable us to offer clients a wide range of integrated services across our segments
• Providing lower total costs and quicker time to market
• Filling sizable public sector infrastructure funding gap
• AECOM plays multiple roles in P3 opportunities incl. adviser (Sell Side or Buy Side), designer, builder or sponsor
• AECOM Capital provides additional avenues to participate in significant market trend
• Significant trend towards design-build in transportation and water markets
Infrastructure investment needed through 2025
Increase in alternative delivery transportation projects in industry since 2002
(Over 1,000 projects in industry as of 2016)
Increase in design-build water and wastewater projects in industry
(More than half of projects in industry were design-build in 2015 versus less than a third in 2009)
Faster delivery speed compared with traditional methods
Page 2
Leveraging Our Global Scale and ServicesThink Global, Act Local
Page 3
Our unique size, scale and diversity enables significant intellectual capital sharing, creating added client value:
• Human capital from 92,000 employees delivers a global network with local expertise
• Unique scale with operations in over 150 countries on 7 continents lowers project delivery costs
• Cross-functional collaboration enables increased revenue opportunities with clients while lowering project sourcing costs
• Advanced technology such as BIM, drones, robotics, 3D printing and mixed reality increases safety and efficiency
92K+ employees
150+ Countries
7 Continents
AECOM
Global Risk Management SystemsNovember 2016
GOLDEN 1 CENTER
United States
Anticipated to be completed later this year, Golden 1 Center
will be the world’s most comfortable, connected and
sustainable sports venue.
Office of Risk ManagementGlobal Presence - Independence from Operations – A sit at the table
Page 5
Carla ChristoffersonAECOM General Counsel
Regis DamourAECOM Chief Risk Officer
Chris MosesDirector C-0 Project
Reviews
Bill QuartermanEMIA
Mike BurnsDirector Global Risk
Programs
John KouchoukosDCS Americas
Richard BarrettAPAC
John CookeMS
Amy WinckoCS
ERM@AECOM
Global Risk Management Systems
Page 6
Enterprise Risk Management (ERM)
• Protects shareholder value by active monitoring of our Inherent and Strategic risk profile
• Measuring Exposure, Readiness and Performance driving continuous improvement
Approval Matrices• Sets decision making responsibilities to the appropriate levels: DCS, CS, MS and ACAP
• Considering Project matters; Safety & Security, Scope & Terms, Contract Type & Size, and
• Non Project matters; Acquisition, Legal & Compliance, Finance, HR and Insurance
Approval Processes• Enterprise Risk Committee, Group Committees and the Hub, comprised of senior leaders, reviewing and approving key pursuits and non
project matters with DoA triggers
• Defining Project Review Categories (C3 to C0) for each project based on the level of risk to AECOM
Office of Risk Management (ORM)
• An integrated group of Corporate and Operational Risk professionals, working closely with Legal and Insurance colleagues
• Driving early engagement with relevant resources, for key pursuits, to allow planning/pricing of adequate mitigation (prevention, avoidance, transfer) and early feedback to clients
• Active participation in claim resolution before these escalate to legal dispute
• Extracting and disseminating lessons learned including through Ecosystem tools and PM training
Integrated Management System
(IMS)
• Capturing, disseminating and perfecting: Policies, Procedures and Instructions (PPIs) in line with our DBFO Vision
• Provides a structured forum for cross functional policy implementation
Project Reviews• Projects are rated for risk level (C3 to C0) and reviewed accordingly and at the appropriate level
• Corporate oversight on C0 Projects with the highest financial, legal and/or technical risk (<50 projects)
• Allow reporting and early detection for quarterly Business Group Reviews
ERM@AECOM
Office of Risk Management (ORM)Mission
Page 7
• ORM Roles in Supporting Global Operations
– An Integrated group of Corporate and Operational Risk professionals, working closely with Legal and Insurance colleagues
– Driving early engagement with relevant resources, for key pursuits, to allow planning/pricing of adequate mitigation (prevention, avoidance, transfer) and early feedback to clients
– Active participation in claim resolution before these escalate to legal dispute
– Extracting and disseminating lessons learned including through AECOM in-house tools (intranet, chatter, etc.) and PM training
ERM@AECOM
Integrated Management System (IMS)Comprehensive Program
Page 8
Department Policy
• Overarching Requirements
• Not How To
Procedures and
Guidance
• Business Group Customization
• Geographic Customization
Disseminate• Linked from IMS
Repository
ERM@AECOM
• Email or posting on Intranet
• link to “What’s New” changing
Communicate
Disseminate Policies Procedures and InstructionsMaturing Business Requirements
Enterprise Risk Management (ERM)
LOS ANGELES INTERNATIONAL AIRPORT (LAX)
United States
“Gateway to the World” boasting the most point of origin / point
of destination travelers in the world with 66+ million passengers
travelling in and out of LAX annually.
Enterprise Risk Management (ERM)Mission
Page 10
• Enterprise Risk Management (ERM) provides an established continuous improvement platform to periodically assess AECOM's top risks , develop cross-functional mitigations, monitor these risks in a consistent manner and report quarterly to management and BoD
• Our mission is to protect shareholder value through this active management of AECOM's top risks:
– Conserving, retaining and increasing cash flow with investments aligned to our risk appetite; and
– Setting expectations, minimizing surprises to continuously improve investor confidence
• ERM risk portfolio and mitigation strategies accounts for both:
– AECOM's strategic goals as the premier fully-integrated infrastructure firm offering a progressive range of services in 150 countries and all our end markets, and
– Marketplace demands and trends
ERM@AECOM
Enterprise Risk Management (ERM)Roadmap
Page 11
FY’10 Initiate ERM
FY’11 – 12 Initial Assessment, Analysis and Mitigation
FY’13Implement Monitoring and Controls
FY’14Reassess, Analyze and Plan Mitigation
FY’15 – 16 Validate Risk Profile thru URS Integration
Structured Board of Directors Reporting
FY’17 - 19
Embedding Inherent Risk Systems
Maturing Strategic Capabilities
Continuously Monitor Emerging Risks
ERM@AECOM
Enterprise Risk Management (ERM)Program launched in 2010
Page 12
Identify, Analyze
and Mitigate
• Key Risks (impact, probability, speed of onset)
• Opportunities
Monitor and
Control
• Emerging Risks
• Top 10 Risks
• Enterprise Enablers
Report Key Risk
Indicators
• Exposure
• Readiness
• Performance
Progress Mitigation
• Delivery Excellence
• eCMO
• IMS
Key Risk Indicators Top Risk Dashboard BoD Oversights
ERM@AECOM
Enterprise Risk Management (ERM)Risks and Enablers
Page 13ERM@AECOM
Top 10 RisksRisk Owners and Managers
Actively Managing and Reporting
• Inherent Risks:
– Safety
– Ethics & Compliance
– Global Resilience
– Errors & Omissions / Quality
– Talent
– Information Security
– U.S. Government Compliance
• Strategic Risks:
– Political (Sovereign & Contractual)
– Mega (Cross-Border) and Integrated Projects
– At Risk (Build) Delivery
EnablersOrganizational enhancements, Tools & Systems,
Processes
• Organization:
– Delivery Excellence
– Operational Excellence & Global Design Solutions
– Assurance: Audit Service Group
• Tools & Systems:
– Ecosystem / ePM
– Integrated Management System (IMS)
• Processes & Guidance:
– DoA Continuous Improvement
– Healthy Start
– AECOM University
– PM Training
– Guidance; Integrated Delivery, MSAs, JVs, etc.
Inherent RisksSafety
Page 14ERM@AECOM
Achieving World Class Safety Results
Inherent RisksGlobal Resilience
Page 15ERM@AECOM
Economic Power Shift
Enabling Technology
Demographic Disparity
Increased Urbanization
Climatic ShiftsResource
Stress
Developing countries will account for an estimated
of global GDP by 2030
Increase in global internet users from 2000 to 2012
Of the world’s population will live in cities by 2030 (Up from 50% in
2013)
Of world’s unemployed are
15-24 years of age
By 2050, costs of extreme weather could reach up to
of world GDP per annum (USD 720b)
Estimate global gap between water supply and
demand by 2030
Global Instability
Navigating Global Instability
Inherent RisksTalent
Page 16ERM@AECOM
for TODAY and TOMORROW
Inherent RisksCompliance
Page 17ERM@AECOM
Ethics + Compliance US Government Compliance
Inherent RisksInformation Security
Page 18ERM@AECOM
Cyber Security Transformation
Inherent RisksErrors & Omissions / Quality
Page 19ERM@AECOM
Internal Capabilities reducing Insurance Demands
Strategic RisksStrengthening the Foundation Aligned to Our Vision
Page 20ERM@AECOM
Political Risk (Sovereign & Contractual)Facilitating Capture and Profitability in Higher Risk Countries
Build Delivery – Fixed Price EPCPursuing Preferred Scenarios to Achieve a Healthy Balance of Risk and Reward
Mega Projects and Integrated Delivery (cross border & cross groups)DBFO Delivering Differentiated Value For Our Clients
• Leading fully integrated infrastructure services firm
• Consistently ranked #1 in key categories, including U.S. and global design
• Executing the world’s most complex and iconic projects
Thank YouMichael Burns, P.E. PgMP
[email protected] Global Risk Programs
BARCLAYS CENTER
United States
The 670,000-square-foot multi-purpose center with
18,000 seats, and105 suites set a new standard in arena
design and construction.
Regis [email protected] Risk Officer