Enterprise Risk Management

  • 1.  Scalable risk ranking tools

    Posted 05-13-2009 11:20 AM

    We are in the processes of revising our risk ranking impact and likelihood matrices. The current versions are useful at the corporate level, but not useful for individual business units.

    The factors that the impact matrix takes into consideration are: financial, reputation, customer and employee. One of the reasons the matrix is not useful at the business unit level is the magnitude of financial loss. A "minor" financial impact at the corporate level is a reduction in net income of less than $2 million.

    We are considering building scalability into the revised matrices so that they can be used by all levels of the organization. Does anyone have experience to share on how they handled the scalability issues and what process was used to develop the matricies?



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    Arita McPherson
    ERM Strategist
    Farm Credit Canada
    Regina Saskatchewan
    Canada
    arita.mcphreson@fcc-fac.ca
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  • 2.  RE:Scalable risk ranking tools

    Posted 05-14-2009 12:16 PM
    Arita, to provide scalability to the consequence scale, consider using a percent of some business-related measure, such as: gross revenue, net revenue, operating income, EBITDA, or similar. These measures should be available for a discrete business unit within a larger company.

    For example, a minor financial impact could be < 0.5-percent of gross revenue, or 2.5-percent of net income.

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    John Brown
    Risk Manager, Supply Chain Development
    The Coca-Cola Company
    Atlanta GA
    United States
    jbrown3@na.ko.com
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  • 3.  RE:Scalable risk ranking tools

    Posted 05-14-2009 12:43 PM


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    Mark Bigelow
    Strategic Risk Analyst
    Premera Blue Cross
    Seattle WA
    United States
    mark.bigelow@premera.com
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