enterprise risk management mcci – bloemfontein 29 october 2013
TRANSCRIPT
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ENTERPRISE RISK MANAGEMENT
MCCI – BLOEMFONTEIN 29 OCTOBER 2013
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ARTHUR ELS – Enterprise Risk Actuary
Managing Director and Senior Actuary at Arthur Els and Associates; a medium-sized firm of Consulting Actuaries and Enterprise Risk Actuaries based in Johannesburg. Clients of the Company include a number of the Top 100 Companies in South Africa.
Arthur is one of the few qualified Enterprise Risk Actuaries in the country. His Company is one of only two practices currently in South Africa offering clients actuarially-based Enterprise Risk Management expertise which is underpinned by the advanced CERA qualification.
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The business world
is constantly evolving
and GROWING
everyday.
more complex
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So shouldn’t
the approach
to MANAGING RISK
evolve as well?
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The post-9/11 business world is one of
Organisations will increasingly rely on high level risk professionals who are independent, impartial to assure stakeholders of their sustainability
– Increasingly stringent regulatory standards
– a rapidly globalising marketplace and
– more demanding and active stakeholders
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and OPTIMISE risk to meet the company’s mission and objectives / goals.
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ENTERPRISE RISK MANAGEMENT
Risk Analysis
Risk Identification
Risk EvaluationRisk Planning
Risk Management
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ENTERPRISE RISK MANAGEMENT / CERA
Compile a detailed risk register Apply statistical techniques for
quantification of the risks Risk based modelling of future scenarios
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EXAMPLE OF RISK REGISTER
Risk No.
Risk Class Description Max duration (yrs)
Impact Likelihood
Control measure
s
Inherent risk Residual risk
Risk ownerLevel Score Level Score
1 Governance Failure of Board of Directors to comply with King III requirements
3Damagin
gModerate
Fully controlle
d
Caution Low
9 OK 0Allan Jones
2 Regulatory Failure of Company to comply with statutory requirements.
25 Severe High Little Danger 16Dange
r12,8
Pat Smith
3 Fraud - internal
Fraud committed by employees 5
Damaging
High Good Danger 12 OK 3Xolani Jabu
4 Fraud - external
Fraud committed by outside persons, including customers and service providers
25Damagin
gHigh Little Danger 12
Caution
9,6Xolani Jabu
5 Project X Danger of project not being completed satisfactorily
1Damagin
gLow Good
Caution Low
6 OK 1,5Des
Plaatjes
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The age of information has come and gone, replaced by the age of business intelligence, which heralds the age of innovation …
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* CERA ~ CHARTERED ENTERPRISE RISK ACTUARY
The (CERA) credential encompasses the most
comprehensive and rigorous demonstration of
enterprise risk management (ERM) expertise available.
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CERA
CERA’S complete a rigorous curriculum that covers probability, financial mathematics, micro / macro economics, construction of actuarial models, advanced finance and enterprise risk management, financial reporting and operational risk.
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CERA represents insight, creativity and integrity. The “CERA” letters after someone’s name indicate to the business world that there is no other type of risk professional better equipped to take a 360-degree view of an organisation’s risk profile.
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CERAS ARE ADVANCING THE ERM FIELD
Enable organisations to be more transparent
Help companies adequately meet strict financial reporting and control requirements
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ADDRESS SECURITY AND TECHNOLOGY ISSUES
Prepare for disaster and business continuity in a post-9/11 world
Help companies remain competitive in the globalised marketplace
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THE TOP FIVE CONSTRAINTS* TO ACHIEVING BUSINESS OBJECTIVES
Cost of doing business Currency volatility Macroeconomic uncertainty General skills shortage Labour unrest
* Source – www.barloworld-logistics.com 2013 Supply Chain Foresight
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THE TOP FOUR CONSTRAINTS* TO ACHIEVING SUPPLY CHAIN OBJECTIVES
Cost of transport Available supply chain skills Labour unrest Efficiency of ports and harbours
* Source – Barloworld Logistics 2013 Supply Chain Foresight
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CERAS focus on how operational risk, investment risk, strategic risk, and reputational risk collectively impact an organisation.
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CERAS ARE QUALIFIED FOR POSITIONS AS RISK ANALYST, RISK MANAGER AND CHIEF RISK OFFICER IN FIELDS SUCH AS:
Broader Financial Services
Consulting Markets
Insurance and Reinsurance
Energy
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CERAS ARE ALSO QUALIFIED IN FIELDS SUCH AS:
Transportation Media Technology Manufacturing Construction Healthcare
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ENTERPRISE RISK MANAGEMENT / CERA
The determination of economic capital taking steps to mitigate undesirable risk likelihood of "black swan" events i.e. APPLYING extreme event theory
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… The business world is constantly evolving ~ growing more complex – in terms of KING III code of governance - ethical leadership, responsible corporate citizenship, the governance of risk, the governance of information technology (IT) …..
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… a window of
OPPORTUNITY
to MANAGING RISK
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“The penalty for not having an intelligent strategy as a business is no longer slower growth. It is death. Innovation has become an even more important element of a Company’s life cycle, since to grow somebody else has to shrink. Competition in being original has just undergone a quantum leap”
~ Clem Sunter
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“ ….. CHALLENGES BECOME OPPORTUNITIES WHEN THE RIGHT PEOPLE JOIN TOGETHER.”
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LETS TALK
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ARTHUR ELS AND ASSOCIATES
E-MAIL : [email protected]
WEBSITE : WWW.ARTHURELS.COM
CONTACT NUMBER : +27 11 441 2700