Question Topic : Etnerprise Risk Management

Read The Rise and Evolution of the Chief Risk Officer: Enterprise Risk Management at Hydro One, T. Aabo, J.R.S. Fraser, and B.J. Simkins, Journal of Applied Corporate Finance, Volume 12, Number 3, Summer 2005, pp. 62 75.

After reading the article, answer the following questions.

a) Has ERM been successful at Hydro One? Explain why or why not.

b) Discuss what you believe are the most critical factors for their success, or lack of success.

c) Are these factors transferable to other organizations, and more particularly financial institutions? What elements of Hydro Ones ERM Implementation transfer, and which do not? Explain.

d) From private conversations, I can tell you that John Fraser does not believe in two-sided risk why do you think this might be? Do you agree with him on this point in the context of Financial Institutions?

e) How important are Figure 3 and Figure 4 which define the various levels of risk tolerance and probability ratings respectively? What role do these types of definitions play in ERM?

f) Why is the Delphi method a good method for ranking risks

a. What are the keys factors in the Delphi method

g) What are the benefits of ERM implementation as outlined in this paper? Do these benefits transfer to financial institutions?

h) Is the transformation of the Chief Risk Officer a good thing? Explain in the context of a financial institution.