OURPFEOPLEMAKETHEDifferenceWALAMARTSorsAdqoptinganEnterpriseRiskWanagementStrategyinaG1/obalDebartmentJohnLewisVPChiefAuditExecutiveWakMartStores,Inc.June,2002WhyEnterpriseRiskMWanagelment2BusinessesfaceincreasingriskssAuditCommitteesoverseeriskmanagementMismanagementdecreasesshareholdervaluesStructuredapproachforassessmentsLinksriskstovaluecreationWhatKeepsYyouAwakeAtNight2?DefinitionofRisk:Anythingthatpreventsyoufromachievingyourbusinessobjectives.CurrencyRatesJncreasedCompetitionProductRecallsLaborJssuesDistributionTraining&DeveJopmentERWW1ss1on。Risksunderstood,measuredandcontrolledBusinessobjectivesachievedthrough:Anticipationcfcriticalevents,andRapidimplementationofoptimaldecisionsCoreBUsInesSsProceSsSeSNon-MerchProcuremenMerchandiseProcuremenLogisticsStrategicPlanningOperationsInformationSystemsTraqitionalRiskKAssessmepntsSilo(functional)approachsVerticalfocus。PresentslimitedviewofcomplexproblemssInformaitionnotsharedacrcssfunctions。RiskinterrelationshipsnotidentifiedsIndependentprioritizationofriskssExcessivecostsmanagingriskEnterpriseRisKAsSsessmepntsCrossfunctionalapproachsHorizontal&verticalfocussComprehensiveview&integratedsolutionssInformationexchangedacrossfunctionssRiskinterrelationshipsidentified。CoordinatedprioritizationofriskssCosteffectiveriskmanagement口ERMTimeHorizonatWal-MartPresentFuture_TIME|DaytoDayManageisentER/ANMResuL/tsRiskuniverseidentified*Riskmapscreatedbydivision*Actionplanssstablishedand;monitored*Linktoshareholdervalue*Risksunderstood,prioritized,controlledEnterpriseRiskWanagementProcess