Author: Philip S. Renaud II

Brexit’s Anticipated Impact on U.S. Middle Market Businesses

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 

Despite the clear vote by British voters to exit the EU, the impact of the vote on both Britain and the European Union is anything but clear. Policymakers are now required to focus attention on some very uncertain and unsettling repercussions.

In what is very likely the earliest data anywhere about the impact of Brexit on U.S. companies, the National Center for the Middle Market at The Ohio State University Fisher College of Business, has just released the results of its survey studying the impact of Brexit on companies within the Middle Market segment. The results have indicated the following:

  • About half of middle market companies say Brexit would have little or no impact on their business.
  • The other half, however feel that they will be impacted. One in eight companies foresee an extremely significant impact.
  • Manufacturers will be impacted more than the market as a whole.
  • Approximately 28% of Middle Market companies say they will reduce investment in the U.K., while approximately 21% will reduce investment elsewhere in the E.U.
  • Much of that money will remain in the U.S., with approximately 26% say they will increase investment in the homeland. Likewise, Asia may also be a direct beneficiary of investment.
  • The study also revealed that an impact on sales and procurement may be seen. Companies have indicated that they will purchase less from Britain given the reduction in British Sterling.
  • An expectation also may exist that increased “red tape” may be an indirect result of Brexit. Questions remain about any changes to customs, tariff on imported goods, quota restrictions, etc., as well as overall changes in import/export trade regulation in the short and longer term.

The complete study can be found at https://go.osu.edu/BrexitMidMarket.

NCMM Brexit Survey 2016

We are appreciative of our partnership with the National Center for the Middle Market and for their foresight and timing in issuing this informative finding.

The Risk Institute at The Ohio State University Fisher College of Business brings together practitioners and researchers to engage in risk-centered conversations and to exchange ideas and strategies on integrated risk management.  Visit The Risk Institute website for more information about how you can join the conversation about enterprise risk management.

The Risk Institute at The Ohio State University Releases its Second Annual Survey on Integrated Risk Management

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPreteIsil Erel
Academic Director, The Risk Institute
Professor of Finance
The Ohio State University Fisher College of BusinessRisk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

 

Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

On June 1, 2016, The Risk Institute at The Ohio State University Fisher School of Business unveiled findings from its second Annual Survey on Integrated Risk Management. The research initiative focuses on how U.S. companies view the role of risk management, how it is structured and the ways it is integrated to support business decisions. Senior leadership from more than 530 financial (23 percent) and non-financial (77 percent) companies both public and private were surveyed for the report.

This year’s survey has demonstrated that risk management continues to evolve and firms are creating holistic and organization wide risk management functions. The survey highlights how integrating risk management plays a key role in a firm’s ability to remain competitive and create sustainable value in the current business and economic climate.  

Respondents of the survey deliver insights across five key areas:

  • Organizational structure and tone at the top
    • Firms are moving toward a more centralized approach to risk management, as it is a source of both growth and value. In fact, half of the firms surveyed shared that senior leadership is allocating more funds for external and internal resources.
  • How risk management is integrated into business processes
    • To effectively integrate risk management into business decisions, firms must recognize business processes. The three leading processes reported by survey participants were:
      • Compliance
      • Strategic Planning
      • Operational Business Planning and Management
  • The scope of risk management
    • The survey highlighted that to limit risk taking by employees in financial and non-financial firms, management extensively takes steps to limit sales at risk (or similarly cash flow at risk). They also require use of financial instruments (e.g. derivatives) as hedges rather than speculative tools, set size limits on projects permissible without limits, and use financial hurdle rates to adjust for risk.
  • Risk management process
    • While many respondents believe risk management is integrated across the firm, they also report that only a subset of business functions are actively involved in identifying, measuring and managing major risks.
  • Disruption
    • Approximately 80 percent of firms participating did not experience a disruptive event in the last year. If they did, most reported that the disruptions were related to regulations, cyber theft of confidential information and or systems failure.

The Risk Institute is excited to continue to participate in the conversation around the evolution of risk management within business, from an integrated perspective of academia and practice. Stay tuned as we dig deeper into the survey results in future posts, and feel free to contact us to continue the conversation or explore ways to engage with us on this mission.

Continue reading The Risk Institute at The Ohio State University Releases its Second Annual Survey on Integrated Risk Management →

Zika – Can We Predict the Next Pandemic Outbreak? (Pt 1)

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 

The World Health Organization (WHO) and other health organizations have called for top level meetings to address the Zika virus and its worldwide impact. Researchers first discovered the virus nearly 70 years ago. Very few cases were reported until 2007 when an outbreak on Yap Island in Micronesia infected nearly 70% of the population ages three years and older. The WHO has warned that the virus could potentially spread to every country in the Americas.

Companies need to focus on how they can mitigate the risk of Zika within the workplace. Does your company have employees in infected regions?

http://www.paho.org/hq/index.php?option=com_content&view=article&id=11554&Itemid=41715&lang=en

Image courtesy of Pan American Health Organization and WHO. Click for more info.

Do you have employees that travel to infected regions? Central to risk mitigation for any employer is to learn as much as possible about Zika and its potential impact to your organization.  Employers need to be flexible. Consideration should be given to delaying trips to infected areas, holding virtual meetings, etc.

An organization’s business continuity plans will need to be tested to respond to geographic specific exposure that could have wider impact upon the business and it customers.

On June 13th, The Risk Institute will host guest speakers, Julie E. Mangino MD, FSHEA (Division of Infectious Diseases, The Ohio State University, and Department of Epidemiology, OSUWMC), Professor Steve Rissing (Department of Evolution, Ecology and Organismal Biology, The Ohio State University), Nancy Green CPCU, ARM (Executive VP, Aon Risk Solutions) and Thomas E. Hopkins (Sr. VP Human Resources (retired), The Sherwin–Williams Company) will collaborate to provide insight into:

  • How evolutionary biology provides a road map into eruptions of Zika and other similar viruses.
  • The facts about the spread of the Zika virus and how to mitigate the fear factor.
  • The facts about prevention, treatment and links to specific birth defects.
  • How to prepare your business for Zika and other pandemic viruses, including business travel concerns.

This first session of our 2016-2017 Executive Education Risk Series will emphasize how to proactively use risk management to balance the risks related to Zika and wider pandemic planning in order to meet business goals and enhance business performance.

The session will provide thought provoking ideas and advance The Risk Institute’s unique role in uniting industry thought leaders, academics and highly respected practitioners in an ongoing dialog to advance the understanding and evolution of risk management. The Risk Institute’s conversation about risk management is open and collaborative with its relevance across all industries and its potential for competitiveness and growth.

 

On June 13, 2016, The Risk Institute at The Ohio State University Fisher College of Business will present the first session of its 2016-2017 Executive Education Risk Series, Zika – Can We Predict the Next Pandemic Outbreak? For more information, or to register, please visit http://go.osu.edu/Zika-u-osu.

 

The Talent War: Managing the Talent Pipeline and Succession Planning

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 

On May 12, 2016, The Risk Institute at The Ohio State University Fisher College of Business will be presenting the final session of its 2015-2016 Executive Education series, The Talent War: Managing the Talent Pipeline and Succession Planning.

All industry sectors from retail to manufacturing regularly face the challenge of recruiting, selecting, onboarding developing and maximizing talent. More and more sectors are reporting significant challenges in recruiting and retaining good talent. Whether caused by rapid advances in technology and skills, changing workplace perceptions of millennials, or pending retirement of the “boomer” generation, businesses are facing a new and complicated set of dynamics.

Session leaders, Anthony J. Rucci (The Ohio State University Fisher College of Business) and Yvonne Kalucis (MXD Group) will collaborate to provide insights intoRiskInstitute_block understanding the changing, complex alignment of talent management to general business strategy. The session will emphasize how to proactively use risk management to balance the risks related to talent management in order to meet business goals and enhance business performance.

The session will provide thought provoking ideas and advance The Risk Institute’s unique role in uniting industry thought leaders, academics and highly respected practitioners in an ongoing dialog to advance the understanding and evolution of risk management. The Risk Institute’s conversation about risk management is open and collaborative with its relevance across all industries and its potential for competitiveness and growth.

The Risk Institute Executive Education Series will complete it’s 2015-2016 season on May 12, 2016 with The Talent War – Managing the Talent Pipeline and Succession Planning, a half-day course for executives. For more information, or to sign up for the session, visit FISHER.OSU.EDU/RISK

 

Business Continuity Management: A Business Case Simulation

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 

Each and every day, businesses face the challenge of managing in the face of disruption. That disruption may be a result of a supply chain failure, natural catastrophe, cyber event, the list of disruptions goes on and on. With the volatility that businesses face, the need to structure proper business continuity / critical incident management plans has never been more important.

According to a recent study authored by Allianz Global Corporate and Specialty, 58% of participants reported that Business Interruption (including supply chain disruption) was a key risk to their businesses.  The Aon Global Risk Management Survey 2015 also lists business interruption as one of the top ten risks facing companies.

To quote Tony Hayward following the gulf oil blast that killed 11 workers and caused one of the worst environmental disasters in US history:

“BP’s contingency plans were inadequate. We were making it up day to day. What was going on was some extraordinary engineering. But when it was played out in the full glare of the media as it was, of course it looked like fumbling and incompetence.”

With this in mind, The Ohio State University Fisher College of Business, held a business case simulation exercise for students on April 15th. The event was cosponsored by The Risk Management Association (a student-led organization) and The Risk Institute. Participating students were divided into teams and presented with a fact-based scenario.  Students were then asked to prepare action strategy against the following “4 R” components:

  • Response (Protect Life and Property, Manage the Incident)
  • Resumption (Resumption of Time Sensitive Operations)
  • Recovery (Recovery of Other Operations)
  • Restoration (Repair/Restore Facilities and Content)

Students worked diligently during the day exercise to think through options, respond to life and safety concerns, communication challenges, manage customer expectations, etc.

Judges for the event were:

  • Keely L. Croxton, Associate Professor of Logistics, Fisher College of Business, The Ohio State University
  • A. Michael Knemeyer, Assistant Professor of Logistics, Fisher College of Business, The Ohio State University, and;
  • Daniel Oglevee, Senior Lecturer in Finance, Academic Director of The Fisher Executive MBA Program, The Ohio State University.

Business Coach for the event was Gregory Clark, a graduate of The Ohio State University Fisher College of Business.  Greg is now Global Lead, Business Continuity DHL Supply Chain. Greg provided very meaningful coaching for the students as they worked through the simulation exercise.

Students were pleased to be able to participate in an exercise that provided the opportunity to exercise material presented in the classroom with a real world, hands-on scenario. The Risk Institute is pleased to have an opportunity to prepare our students for events that they will experience once in business. As has been said on numerous occasions, anyone can manage an organization when things are going well – it is when things become difficult that true leaders emerge.

The session proved thought-provoking for the students and demonstrated The Risk Institute’s unique role in uniting students, industry thought leaders, academics and highly respected practitioners in an ongoing dialog to advance the understanding and evolution of risk management. The Risk Institute’s conversation about risk management is open and collaborative with its relevance across all industries and its potential for competitiveness and growth.

 

For more information about upcoming events, our students, partners or research, visit our website: fisher.osu.edu/centers/risk.

Risk Culture Plays a Critical Role in the Financial Services Industry

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 

The Risk Institute at The Ohio State University held the first in a series of breakfast sessions that focused on Risk Culture in the Financial Services Industry.

The session was moderated by The Risk Institute Academic Director Dr. Isil Erel who guided the discussion of the four-person panel of experts comprised of:

The session concentrated on how the financial crisis has elevated regulatory risk to a more central point in the discussion of risk management. The panel focused on how an organization’s culture is measured. Measurement can include the more traditional standard, regulatory approach with the evaluation of policies and/or process breaches to the softer side of culture that measures the “tone at the top.” The softer actions can include “raising your hand” when a process, policy and/or an ethical challenge is observed.

Panel Risk Culture Financial Institutions 3.2016

Helga Houston, Kevin Allard, Steve Chenenko, Rick Wilson

The panel went into an in-depth discourse for session attendees on how three levels of defense need to be present in an institution to evaluate the proper culture within. Those include:

  1. Business Unit oversight
  2. Risk Management oversight
  3. Auditor and/or Regulatory oversight

It is vital for all three oversights to be integrated in an organization’s risk culture. Furthermore, it is important to consistently gauge the organizational culture to evaluate if associates are doing the right thing, and whether they believe in the organization and what it stands for or if they are acting simply because they are instructed to do so.

The session proved thought-provoking and demonstrated The Risk Institute’s unique role in uniting industry thought leaders, academics and highly respected practitioners in an ongoing dialog to advance the understanding and evolution of risk management. The Risk Institute’s conversation about risk management is open and collaborative with its relevance across all industries and its potential as a tool for competitiveness and growth.

For more information about upcoming events, our students, partners or research, visit our website: fisher.osu.edu/centers/risk.