Triangulating Risk Profile and Risk Assessment: A Case Study of Implementing Enterprise Risk Management System

Abol Jalilvand () and Sidharth Moorthy
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Abol Jalilvand: The Quinlan School of Business, Loyola University Chicago, 16 E. Pearson, Chicago, IL 60611, USA
Sidharth Moorthy: Morgan Stanley, Mumbai 400013, India

JRFM, 2023, vol. 16, issue 11, 1-17

Abstract: Establishing an enterprise risk management (ERM) system is widely viewed as providing firms with the tools and processes needed to build resilience and expertise, enabling them to manage the consequences of crises that have led to the collapse of major firms across different industries globally. Intended for use in advanced accounting, auditing, and finance courses, this case study (of a true event) describes the development and implementation of an ERM system for a U.S. multinational nonprofit firm during the 2015–2021 period. The case study’s main learning objectives are several-fold. First, couched within the recent economic environment, it informs students on some of the more important academic and applied research on corporate risk management. Second, students will learn to analyze the content of a questionnaire designed to capture the integrated effects of the firm’s risk culture, risk structure, risk governance, and control for establishing its risk profile. Third, they will learn to create and apply multi-dimensional risk indices to measure and prioritize the firm’s risk exposures. Finally, the last learning outcome focuses on strategies to triangulate the firm’s overall risk profile and risk prioritization results to construct mitigation strategies that build resilience and create value through risk diversification, information signaling, the exploitation of natural hedges, and enhancing the board’s governing efficiency. The nonprofit nature of the firm in this case study introduces no methodological or conceptual constraints or limitations in applying the proposed risk management methodologies to for-profit or publicly traded firms.

Keywords: risk profile; enterprise risk management (ERM); accounting and finance education; risk maturity model; multi-dimensional risk indices; mitigation strategies (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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