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Enterprise Risk Management
Roberta WagnerPartner, Bugbee Wagner PLLC
Copyright Bugbee Wagner PLLC 2013
Jackson Pollack
A Small Team Delivering Big Results
Ellin Larimer
RISK VERSUS REWARD
A Small Team Delivering Big Results
Three Benefits of
ERM that can Help Most Banks
1. Risk Appetite Statement 2. Key Risk Indicators 3. Focus on Organization and Culture Risk
Key Performance Indicators (KPI)Key Risk Indicators (KRI)Risk ToleranceRisk Appetite Statement (RAS)Risk Assessment System (RAS) (RA)Enterprise Risk ManagementCOSO
Lingo
COSO FrameworkA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
COSO Framework Risk ResponseA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
COSO FrameworkA Small Team Delivering Big Results
Focuses board on strategic issues instead of transactions
Improves board reporting Embodies an upfront agreement on risk
tolerance Strengthens discussion of risk
Benefit #1 Board Adopted Risk Appetite Statement
Rothko
A Small Team Delivering Big Results
Developing the RAS (In ERM lingo)
Identify Strategic Risks
Identify the Key Performance Indicators (KPI)
Many KPIs are already included in your policies and board reports
Define risks levels
Set risk tolerance
Identifying Strategic RisksA Small Team Delivering Big Results
A RISK APPETITE STATEMENTA Small Team Delivering Big Results
A RISK APPETITE STATEMENTA Small Team Delivering Big Results
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
Lets Try ItP. S. Key Performance Indicators -Quantitative and Qualitative
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
2013
Sample Community Bank RAS Key Performance Indicators (KPI)WILLINGNESS TO ACCEPT RISK
Monitoring your Risk Appetite
Strategic Risks
Risk Appetite Level
Current Risk Level
Out-of-Risk Tolerance
Risk Trend
Low
Medium
High
Organization/Culture
Yes
Decreasing
Asset Quality
No
Stable
Earnings
No
Stable
Liquidity and Asset Liability Management
Yes
Increasing
Operations
Yes
Decreasing
Technology
Yes
Decreasing
Compliance/Audit
No
Decreasing
Regulatory/Legal
No
Stable
Reputation
No
Stable
Capital
No
Stable
A Small Team Delivering Big Results
ERM Dashboard
Its a Process
A Small Team Delivering Big Results
Identify Strategic
Risks
Develop Risk Appetite
Statement
Conduct Risk Assessments
Identify Out-of-tolerance
Create Action Plan
Ongoing Reports
A Small Team Delivering Big Results
Benefit #2 - Key Risk (Future) IndicatorsA Small Team Delivering Big Results
Lets Try It
Cher Cartwright
A Small Team Delivering Big Results
Benefit #3 - Organization and Culture Risk
Organization/Culture RiskBad news network
New products and services
Silos
ERM Committee
A Small Team Delivering Big Results
Organization and Culture Risk
Enterprise Risk Management
1. Make sure the process adds value2. Identify, mitigate, control, and
monitor risk to gain reward 3. Develop a Risk Appetite Statement4. Think about external indicators (KRI)5. Strengthen organization and culture
Roberta Wagner253-853-3408
Copyright Bugbee Wagner PLLC 2013
mailto:[email protected]
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