NOTICE: Proprietary and Confidential
This material is proprietary to EDGAR Online. It contains trade secrets and confidential information which is solely the property of EDGAR Online. This material shall not be used, reproduced, copied, disclosed,
transmitted, in whole or in part, without the express consent of EDGAR Online. The material shall also not be used to reverse engineer EDGAR Online’s systems or processes.
© 2012 EDGAR Online, Inc. All rights reserved.
EDGAR Online The Risk-Management Curve:
What Is the Best Approach to Staying Ahead?
David PriceCOO and CFO
January 30, 2012
Confidential – Do Not Distribute
It is NOT:• A lengthy single document that gets reviewed,
updated and then re-filed annually• Only something the Board should worry about• The sole responsibility of the CFO to oversee• A process focused on eliminating the negative
Effectively dealing with uncertainty and associated risk and opportunity, enhancing the
capacity to build value
2
What is Enterprise Risk Management (“ERM”)?
Confidential – Do Not Distribute
• Aligning risk appetite and strategy• Enhancing risk response decisions• Reducing operational surprises• Identifying and managing multiple and cross
enterprise risks• Seizing opportunities• Improving deployment of capital
3
The core elements of ERM
Confidential – Do Not Distribute
• Internal environment• Objective setting• Event identification• Risk assessment• Risk response• Control activities• Information and communication•Monitoring
4
The role of the CFO in ERM
CFO ParticipationHMMHMHHH
Confidential – Do Not Distribute
The CFO is the• primary owner of data • “Measurer”• “Predictor”• “Modeler”
5
The CFO role is participation; not 100% ownership
The CFO needs• Access to data and information• In the right format• Reliably• Quickly
Confidential – Do Not Distribute 6
ERM as a component of a company’s Governance, Risk and Compliance (“GRC”) framework
Organizations leveraging GRC processes desire to establish a regulatory or internal framework for satisfying governance
requirements, evaluate risk across their enterprise and track how the organization complies with the established
governance requirements. GRC processes typically fall within one of four key domains: IT, operations, finance and
legal.
7Confidential – Do Not Distribute
Where GRC activity resides in organizations today
44%
19%
20%
17%
ITFinanceOperationsLegal
8Confidential – Do Not Distribute
• Lack of resources• Lack of cooperation or collaboration• Complexity of existing technologies• Lack of clear leadership• Inability to set priorities
Top 5 barriers to effective GRC
9Confidential – Do Not Distribute
• Sarbanes Oxley• The banking industry meltdown• The desire for more real time data
Increased intensity and focus on GRC
Shareholders, customers, employees and all other stakeholders are demanding that companies address
the GRC issue head on – and deliver solutions
10Confidential – Do Not Distribute
• A pronounced emphasis on continual improvement in risk management• Comprehensive, fully defined and fully accepted
accountability• All decision making explicitly addresses risk and
risk management• Continual communication• Risk management is considered central to all
management processes
Attributes of Excellence in GRC
Confidential – Do Not Distribute
Addressing GRC in the Enterprise
MONITOR
ACT
ANALYZE
ANALYZE• Supply Chain Data• Emerging Industry
Trends• Internal Audit
Process• External Risk
Factors
MONITOR• Competitive
Landscape• Corp.
Governance Factors
• Institutional Ownership
• Adherence to Compliance Requirements
ACT• Create Flexible Internal Reports• Author & Publish Disclosures• Implement more effective internal controls• Comply with Exchange Listing Mandates
12Confidential – Do Not Distribute
The GRC magic quadrant
Source: Gartner magic quadrant for GRC July 2011
13Confidential – Do Not Distribute
• International technology standard for transmitting and consuming data• An electronic tag based system to describe and
identify different financial line items• In the US, an SEC mandate requires all public
companies to file in XBRL
XBRL – A new reporting standard and data source
XBRL provides instant access to accurate data
Which Airliner is most impacted by fuel costs?Which Airliner is most impacted by fuel costs?
Tax Rates: Effective vs Statutory
Pension Asset Returns: Unrealistic Expectations?
Confidential – Do Not Distribute
SEC XBRL Filings Market Evolution
2011 – 0%2015 – 30%
SEC Regulatory XBRL Disclosure Market
Filing Agent Outsource
Disclosure Management
Software
Financial Management
/ ERP Systems
Full Service(BPO)
Self Service(Software)
Assisted Self Service(SaaS)
2011 – 90%2015 – 30%
2011 – 10%2015 – 40%
NOTICE: Proprietary and Confidential
This material is proprietary to EDGAR Online. It contains trade secrets and confidential information which is solely the property of EDGAR Online. This material shall not be used, reproduced, copied, disclosed,
transmitted, in whole or in part, without the express consent of EDGAR Online. The material shall also not be used to reverse engineer EDGAR Online’s systems or processes.
© 2012 EDGAR Online, Inc. All rights reserved.
EDGAR Online The Risk-Management Curve:
What Is the Best Approach to Staying Ahead?
David PriceCOO and CFO
January 30, 2012
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