0URPEOPLEMAKETHEDifferenceMWIALAMIARTSorseAdoptinganEnterpriseRfskWanagementhStrategyinaG1/obalDepartmentJohnLewisVPChiefAuditExecutiveWakMartStores,Inc.June,2002WhyEnterpriseRiskManagement2BusinessesfaceincreasingrisksAuditCommitteesoverseeriskmanagementsMismanagementdecreasesshareholdervaluesStructuredapproachforassessmentLinksriskstovaluecreationWhatKeepsYouAwaKkeAtNight2?DefinitionofRisk:Anythingthatpreventsyoufromachievingyourbusines$Dbjectiyes-CuyrencyRates/ncreasedCompetitionProductRecallsLaborJssuesDistributionTraining&DevelopmentERWMWissionRisksunderstood,measuredandcontrolledsBusinessobjectivesachievedthraugh:Anticipationofcriticalevents,andRapidimplementationofoptimaldecisionsCoreBuUusIinessProceSsSesNon-MerchProcuremenMerchandiseProcuremenLogisticsStrategicPlanningInformationSystemsTraqitionalRiskKAssessImepnt。Silo(functional)approachsVerticalfocussPresentslimitedviewofcomplexproblemsslInformationhotshafedaCrossfunctions。RiskinterrelationshipsnotidentifiedsIndependentprioritizationofrisks。ExcessivecostsmanagingriskEnterpriseRiskKASsSeSsSsI0entsCrossfunctionalapproachsHorizontal&velrticalfocussComprehensiveview&integratedsolutionssInformation-exchangedacrossfunctionssRiskinterrelationshipsidentifiedsCoordinatedprioritizationofriskssCosteffectiveriskmanagement山ERMTimeHorizonatWal-MartPresentFuture_TIME丨DaytoDayStrategicManagementPlanningERAMResL/tSs*Riskuniverseidentified*Riskmapscreatedbydivision*Actionplansestablishedandmonitored*Linktoshareholdervalue*Risksunderstood,prioritized,controlledEnterpriseRiskWanagemeptProcess