Q4.

Should private-sector companies embrace ERM in a way similar to Hydro One's approach?

What are the contingencies of this process?

Answer 4.

The Chief Risk Officer of Hydro One Mr. John Fraser strongly believed that if a company does not

partake risk management, for them it would be like driving a car without brakes", which

fundamentally means a company with no rock-hard ERM plan would face downfall in the long

run.

An organized action-based risk management will enable the companies to detect possible risks

that they may be latent. Private sector companies should embrace ERM in a similar way as that

of Hydro One's, as the company is tremendously active in their risk management process,

barring few inconsistencies which can be worked upon.

Hydro One's risk management team involved as many specialists from the industry to bring

diverse opinions to the table. There was also regular risk profiling, workshops held in phase one,

and an internal audit committee -together which point towards that Hydro One was much more

prepared in case something goes wrong as compared to any of the competitors who did not

have an active risk management. Other private companies should have risk management

because it is crucial to essentially recognize the potential risks that may be detrimental to them.

It will also help companies in cost-cutting because usually the losses of risks can be much

advanced than the cost involved in setting up a solid risk management plan. Not just the cost

factor, companies may also be able to serve their customers better which will in turn help them

to retain customers and gain more. The standards of ERM followed by Hydro One set a virtuous

example in the industry. The other private companies should definitely seek inspiration from

them and embrace it.

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