...ERM Paper LAW/531 ERM Paper The business regulation simulation presented involves Alumina Inc., a United States based aluminum manufacturing corporation located on the fringes of Lake Dira. Alumina was discovered to be in violation of environmental discharge norms following a routine EPA compliance evaluation inspection five years ago. The company subsequently corrected this violation and has since enjoyed a good overall environmental compliance record. This paper will identify potential tort risks resulting from this violation and utilize the seven-step Harb process to mitigate associated business risks. Torts Alumina Inc. is considered one of the largest aluminum makers in the world. The company operates in Erehwon and is under the EPS’s jurisdiction in region 6. The first tort against Alumina was found to be negligence. Five years ago, Alumina failed to follow the environmental discharge norms set by the EPA that resulted in high levels of PAH in the samples. Polycyclic aromatic hydrocarbons (PAH) are a family of chemicals primarily derived from oil and coal but also produced as byproducts from burning of a variety of materials (Nevison, 2008). The EPA demanded a clean-up in which Alumina quickly complied and rectified the negligence allegation. Alumina was allowed to continue business without prosecution and complied with all regulation following the incident. However, Kelly Bates, a resident of the community where Alumina operates, is claiming that her 10-year-old...
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...2013 ERM PAPER: ASSIGNMENT 2: Identify potential tort risks that were addressed the simulation .Classify the type of each of these torts, such as negligence, strict liability, and so on. Identify a tort violation from the simulation. Then use the 7- step process as defined in the Harb article to apply the risk management to mitigate the business risk associated with that violation. The business regulation simulation presented involves Alumina Inc. aluminum maker, operating in 8 countries. Alumina was reported to be in violation of environmental discharge norms in a routine EPA compliance evaluation inspection 5 years ago. The company corrected the violation and has enjoyed overall environmental regulation compliance record. This paper will identify potential torts resulting from this violation and utilizing the 7 Step Process. Torts: Negligence: The Company failed to follow the environmental discharge. Another tort that would have resulted in litigation would be liability with Alumina, Inc. The managers trying to handle the situation may decide to test for further PAH violations. With a liability tort management should seek some kind of mediation for damages toward the Bates family through AAA (American Arbitration Association). Harb Process: 1. Management Commitment- Risk Management effectiveness: The Company (ALUMINA) must commit in developing and managing the ERM process. Promoting and integrating the benefits of ERM can be beneficial to Alumina as first step in minimizing...
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...ERM Team Paper Whenever an individual purchases a product he or she has certain expectations. One expectation may be that the product works the way it is advertised. Quick Take Video is in dispute with Non-Linear Pro for an alleged faulty video editing program. Team B will identify the potential risks that arose in the product liability dispute, identify the tort violations, and use the seven-steps process to apply the risk management process mitigating the business risks associated with the violations. Identification of the Potential Risks that Arose in the Product Liability Video Entering into a contact creates the potential for tort risks and violations. Regardless of the type of contract that we enter when purchasing a product, when one expects the product to work for the purpose in which it was intended. In the product liability video that Team B viewed, Non-Linear Pro implied that their video editing system was an easy to learn, top-of-the- line video editing system. After putting the equipment to use, employees began to realize that the top-of-the-line system was everything but top of the line. Inadequate memory, the Non-Linear Pro’s editing system could not keep up with the high-resolution and crashed constantly. Employees had each taken a one-day course with their trainer, reviewed the video tutorial and read the manual, without any positive results. It is very clear that the Non-Linear Pro misrepresented the quality of their product to Quick Takes Video....
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...ERM Paper Atul Govande, Kyle Cashulin, K.Yamada-Yuge, Miguel Montano LAW 531 April 2, 2012 JAMES EISENMAN ERM Paper Our Team selected option-2 part of the assignment. We watched the Product reliability video. During the video presentation, Quick Take Video, a video editing company, purchased the video editing software from Non-Linear Pro. They purchased this software hoping to reduce their existing video editing time. They selected this software because the sales person from the Non-Linear Pro Company assured Quick Take Video that the software would accomplish their needs to cut the video editing production times in half. The day software was delivered to the company, employee Janet and her associate quickly started working on it. After completing the training and going through the manuals, they were unable to make the software perform as assured by the Non-Linear Pro. They were unable to get the software functioning more than five minutes because of software crashes and lock-ups. Their supervisor questioned their findings about the software. Janet and her associate explained to the supervisor that the entire company took one day training and read the manual but still could not get software working. No-Linear Pro suggested that product training will help the software to be up and running in a day and will be twice as fast reducing the production time in half. To make thing worse Janet cut her finger on a sharp flange from the CD drive. The packaging was very poor...
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...A tort is a civil violation that causes injury or harm to a party, which tort law seeks to provide relief for those damages (Tort Law Overview, 2010). There are several main categories of tort law that are “intentional torts, negligent torts, and strict product liability torts” (Tort Law Overview, 2010, para. 4). We will use the above-mentioned categories to discuss the tortious acts caused by Nonlinear Pro against Quick Takes Video. We will identify potential tort risks, apply Harb’s 7-step risk management process to the main tort violation to mitigate the risk, and discuss when it is time to involve legal counsel. Potential Tort Risks After reviewing the product liability video Team A found there were a number of torts violations, we will discuss intentional torts, negligence, product liability. Intentional Torts According to Cheeseman (2010) an intentional tort is, “a category of torts that requires the defendant possessed the intent to do the act that caused the plaintiffs injuries” (p. 75). Here, we will discuss how Nonlinear Pro intentional misrepresented the product to Quick Takes Video. Intentional Misrepresentation. Intentional Misrepresentation is, false representation of material facts with the scienter, the innocent party must rely on the misrepresentation, and there is an injury (Chesseman, 2010). Nonlinear Pro promises Quick Takes Video a superior product that will meet their needs and cut project time in half. These benefits came at a lower cost than their...
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...Steps in implementing ERM. (10) 1. Create value for the organization. 2. Understand the standards already established. 3. Inventory what the organization is already doing. 4. Seek help and support. 5. Keep it simple. 6. Start small. 7. Go for the quick wins. 8. Delegate “fixes” to risk owners. 9. Report on progress. 10. Develop “soft” skills to be able “sell” ERM to organizational leaders. RIMS Risk Maturity Model. – to determine where its organization is in terms of risk management development. 1. Nonexistent-Limited risk management activity and no ERM program. 2. Level 1: Ad hoc-Uses ERM process for singular events. 3. Level 2: Initial-Early stages of ERM implementation. 4. Level 3: Repeatable-ERM being processed regularly by various units in the organization. 5. Level 4: Managed-Skillful use ERM process is decisions on risk. 6. Level 5: Leadership-Board and senior management fully embrace and guide ERM and organization is a culture of risk ownership and accountability. Ways to express risk appetite. (7) 1. Setting a boundary on a probability and impact grid 2. Economic capital measures/balance sheet-based expressions 3. Changes in credit ratings 4. Changes in credit ratings 5. Value-based measures 6. Limits/targets or thresholds for key indicators 7. Qualitative statements Role of organizational infrastructure in implementing ERM. (4) 1. Communication system. 2. Education...
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...managing risk in a way that enables the corporation to take advantage of valueenhancing opportunities. A missed strategic opportunity can result in a greater loss of (potential) value than an unfortunate incident or adverse change in prices or markets. As in the past, many organizations continue to address risk in “silos,” with the management of insurance, foreign exchange risk, operational risk, credit risk, and commodity risks each conducted as narrowly focused and fragmented activities. Under the new enterprise risk management (ERM) approach, all would function as parts of an integrated, strategic, and enterprise-wide system.1 And while risk management is coordinated with senior-level oversight, employees at all levels of the organization are encouraged to view risk management as an integral and ongoing part of their jobs. While there are theoretical arguments for corporate risk management,2 the main drivers for the implementation of ERM systems have been studies such as the Joint Australian/ New Zealand Standard for Risk Management, Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the U.S. (in response to the control problems in the S&L industry), the Group of Thirty Report in the U.S. (following derivatives disasters in the early 1990s), CoCo (the Criteria of Control...
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...management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. This paper seeks to explain the ERM process, its history, approach and practice. 1.2 Summary of Enterprise Risk Management principle The ERM approach differs from the traditional risk management approach as the focus is placed on an enterprise-wide strategy. Meilbroek (2002) argues that in order to achieve integrated risk management, a company must review and assess all the risks that could potentially affect its value. This core principle of ERM ensures that senior managers' focus is engaged on the uncertainties around the company's entire asset portfolio. A second fundamental concept of ERM relates to the people that carry out and manage the process. Although ERM is the ultimate responsibility of the board of directors with the support of senior management, (i.e. a top-down process) it must be noted that in order for the approach to be enterprise-wide, every employee from every level of the organisation must support the framework. Without everyone's support into the process, the ERM infrastructure would be worthless. (Meilbroek 2002, 55 - 66) Furthermore, as discussed in Protiviti's bulletin paper (2006), companies will need to be aware that they will require to be open and flexible to change. The ERM initiative can change organisational behaviour with the need for "building awareness, developing buy-in and ultimately...
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...Enterprise Risk Management Enterprise risk management (ERM) is the latest name for a risk management approach to business risks. Forerunners of this term include corporate risk management, business risk management, strategic risk management, integrated risk management, and holistic risk management (D'Arcy, 2001). Implementing the techniques of ERM will allow businesses to manage any potential tort issues and manage any potential civil suit cases. Tort is defined as a wrongful act or damage done willfully or negligently. The circumstances involving a tort can be strict liability or breach of contract that can bring about a civil suit (Cheeseman, 2010). This paper will provide potential tort risks that arose in the product liability video between Non-Linear Pro (NLP) and Quick Takes Video (QTV), identify a tort violation, and apply the 7-step process of enterprise risk management to mitigate the business risk associated with the violation. Potential Risks Some of the potential risks for NLP are the editing system has taken longer to set up, it has defects in manufacture and design, and it is an inferior product that did not meet the expectations of QTV. QTV leased the editing system from NLP with the understanding the new editing system would save QTV a substantial amount of time. The fact the videos had to be digitalized before the editing system could used was not mentioned by NLP. This would be a time-consuming process, which would cause a loss of production resulting...
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...multitude of existing challenges of operating in today’s global business climate. The threat of catastrophic loss – from terrorism, natural disasters, financial mismanagement, IT security breaches, supply chain disruptions and more – demands preparedness to assure financial and business continuity. Yet recent studies suggest few companies fully understand or are properly prepared for the breadth of risks they encounter. Historically viewed as the domain of the CFO, less than 20 percent of enterprise risks are financial, legal or compliance in scope, yet all risks can ultimately have a financial consequence. Addressing the scope of Enterprise Risk Management (ERM) requires a level of organizational collaboration that culturally and practically can be very difficult to implement. The first step toward creating a robust ERM program encompasses understanding the scope of risk management and nurturing collaboration and preparedness – making it a “team sport” across the enterprise.1 Executive...
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...5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. What is Enterprise Risk Management (ERM)? Why implement ERM? How does the scope of ERM compare to existing risk management approaches? What is the value proposition for implementing ERM? Which companies are implementing ERM? If companies are not implementing ERM, then what are they doing? Who is responsible for ERM? What are the steps companies can take immediately to implement ERM? Is ERM applicable to smaller and less complex organizations? Why have companies that have tried to implement ERM failed in their efforts? Does implementation of ERM ensure the success of a business? What is the difference between ERM and management? What does it mean to “implement ERM”? Generally, how long does it take to implement ERM? Is there any way to benchmark the level of investment required to implement ERM? Don’t successfully run companies already apply ERM? How long has ERM been around and why is there a renewed focus on it? What percentage of public companies currently have an ERM process or system? Is there an example of effective ERM as it is applied in practice? How does the application of ERM vary by industry? Are there any organizations that need not implement ERM? What are the regulatory mandates for implementing ERM? Are standards for implementing ERM different for private and public companies? Must companies have sophisticated processes in all areas of risk management to realize the benefits of ERM? 1 ...
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...to Quick Takes Video. The students were asked to identify potential tort risks in the video, to use the seven key elements of successful enterprise risk management to help mitigate associated risks, and to determine the criteria of involving legal counsel in product liability disputes. Potential Tort Risks Business-to-business sales are an important aspect of a supply and demand economy. In the video case study Product Liability the transaction demonstrated highlights some of the tort scenarios a business manager may encounter during the course of business. The torts risks in the video are classified in three categories. Although not all the tort risks are appropriate for follow up action, one tort risk is a clear violation. Through a process of analysis, the determination of the business manager may be to involve legal counsel to recover damages for the tort. There are three categories of tort doctrine. As stated by Cheeseman (2010) “These tort doctrines include negligence, misrepresentation, and the modern theory of strict liability” (p. 94). Although the purchaser will likely have a difficult time proving negligence, the other two doctrines are appropriately demonstrated in the video case study. Misrepresentation is described by Cheeseman...
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...for the implementation of Enterprise Risk Management in the banking sector of the highly expansive but volatile Asian economy?” I chose to do an in-depth study of this area of risk management because as I am Australian, it is extremely important for me to start to fully understand the workings of our closest economic partner and the future of our economy which is driven by the expansive growth that is rolling through Asia. I was also intrigued into the steps needed to fully adopt a risk management system in an entity. It should be noted that the focus of this paper is on the developing region of South-East Asia and less on the more developed parts of Asia including China and Korea. Matthew Dichiera 11167674 Contents 1 – Introduction 2 – 1997 Asian Financial Crisis and effect on vision of risk management 3 – Overview of risks faced by banks in the developing Asian region 4 – Importance of Enterprise risk management (ERM) 5 – Strategies of implementing ERM and the challenges associated. 6 – Conclusion 7 – References Introduction The Asian economy is a vehicle of highly expansive growth and even higher volatility, it is an area of the economic world which must be treated with much anticipation and be viewed with excitement but also must be monitored and watched extremely carefully as was shown by the infamous Asian financial crisis of 1997. Opportunities for growth are high, which is shown by the high average growth rates of most countries in the area and...
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...C o m m i t t e e o f S p o n s o r i n g O r g a n i z a t i o n s o f t h e T r e a d w a y C o m m i s s i o n Thought Leadership in ERM R I S K A S S E S S M E N T I N P R A C T I C E By Deloitte & Touche LLP Dr. Patchin Curtis | Mark Carey The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your professional adviser, and this paper should not be considered substitute for the services of such advisors, nor should it be used as a basis for any decision or action that may affect your organization. Authors Deloitte & Touche LLP Principal Contributors Dr. Patchin Curtis Director, Deloitte & Touche LLP Mark Carey Partner, Deloitte & Touche LLP COSO Board Members David L. Landsittel COSO Chair Marie N. Hollein Financial Executives International Douglas F. Prawitt American Accounting Association Chuck E. Landes American Institute of CPAs (AICPA) Richard F. Chambers The Institute of Internal Auditors Sandra Richtermeyer Institute of Management Accountants Preface This project was commissioned by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which is dedicated to providing thought leadership through the development of comprehensive frameworks and guidance on enterprise risk management...
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...Risk Management – Kentucky Farm Bureau Insurance Christopher Peer CMGT/582 – Security and Ethics John Harvey Overview Kentucky Farm Bureau Insurance is challenged to align security with business requirements. Business operational and financial integrity alongside compliance mandate that adequate and appropriate policy, operational and technical controls are in place to protect the organization and its information assets. To validate that its security and risk management program is effectively managed to business requirements, KFB relies on an effective risk assessment program to evaluate information security, set priorities, identify weaknesses and shortcomings in current processes, and define changes to improve the overall effectiveness of the security program. KFB frequently compares their information security program to others in the same industry sector to provide appropriate guidance on strengths and deficiencies in the program so they can maintain an appropriate level of information security for their business. The Assessment Approach The Kentucky Farm Bureau risk assessment program is based on industry best practices in the areas of information security and risk management. These practices are first introduced to key management and security personnel to develop proper methods for improving the information security program. The assessment starts with the data gathering phase to collect data that will be used to adapt the assessment data model to the KFB environment...
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