S&P ERM Process Timeline

The Issue:

	•	Standard & Poor’s Includes ERM Review as Part of its Ratings Process Beginning in 2Q 2008
	•	S&P Uses Strategic ERM to Measure Management Leadership

The Question:

During your upcoming S&P visit, is your organization ready to answer analysts’ questions about:

	•	“The influence of risk management on budgeting and management compensation”?
	•	Or, “management’s view of the most consequential risks the firm faces, their likelihood, and potential impact on credit”?
	•	“Internal and external risk-management communications”?
	•	Or, “the role of risk management in the strategic decision making process”?

The Expectations:

S&P says it will “emphasize risk-management culture and strategic risk management.”

S&P’s Expectations	Riskonnect® ERM Value
Expectations for risk acceptance and avoidance	• Establish risk targets • Clearly illustrate company’s acceptable risk level and risks outside that level
Transition from cost/benefit to risk/reward	• See the impacts of risk on objectives and financials • Include uncertainty as a factor in strategic planning
Board and management responsibility	• Comprehensive communication platform • Effective for communicating to your board
Communicate efforts to manage risks internally and externally	• Platform provides ability to communicate risk assessment and mitigation activity • Patent-pending dynamic visualizations of risks, their relationships and relative impacts
S&P’s Believes ERM is NOT
To eliminate all risks	• Visualizations of risks enable users to identify, assess and mitigate key risks across the breadth of the organization
Compliance focused	• Manipulation of visualized risks moves beyond the traditional check-box approach
Avoid all losses	• Unique visualizations of risks enable user to quickly see risks that can have a material impact on the organization
Disjointed data process	• View of how risks interrelate across company silos • Complete tracking of processes and history
Rigid rule set	• Adapts to client’s methodology • No specific methodology prescribed
Same for all industries	• Flexible, customizable, adapts to your business process

The Impact:

	•	Your organization can realize value and opportunity with a strong strategic ERM program.
	•	Your S&P rating could be affected as early as 2Q 2009.
	•	Your S&P credit rating is one risk you don’t want to take.

The Solution:

	•	Riskonnect® provides a web-based, comprehensive ERM system that adapts to your business process and enables you to integrate a strategic ERM program throughout your organization.
	•	Contact Riskonnect® now and accelerate the maturity of your ERM program.

The above is based on the Teleconference 11:00 AM MAY 9, 2008 hosted by Steven Dreyer and David Ingram of S&P (see also the article: “Standard & Poor’s To Apply Enterprise Risk Analysis To Corporate Ratings”, issued May 7th 2008)