Enterprise Risk Management

Provide a reflection of at least 500 words (or 2 pages double spaced) of how the knowledge, skills, or theories of this course have been applied, or could be applied, in a practical manner to your current work environment. If you are not currently working, share times when you have or could observe these theories and knowledge could be applied to an employment opportunity in your field of study.

Syllabus :

ERM in Operations

Chapter 3, “ERM at Mars, Incorporated: ERM for Strategy and Operations” ERM in Healthcare

Chapter 5, “ERM in Practice at the University of California Health System

Strategic Risk Management

Chapter 6, “Strategic Risk Management at the LEGO Group: Integrating Strategy and Risk Management”

Chapter 9, “Lessons from the Academy: ERM Implementation in the University Setting”

Chapter 12, “Measuring Performance at Intuit: A Value-Added Component in ERM Programs”

Chapter 15, “Embedding ERM into Strategic Planning at the City of Edmonton”

Chapter 18, “BlueWood Chocolates”

Chapter 19, “Kilgore Custom Milling”

Chapter 22, “JAA Inc.—A Case Study in Creating Value from Uncertainty: Best Practices in Managing Risk”

Chapter 25, “Uses of Efficient Frontier Analysis in Strategic Risk Management: A Technical Examination”

Chapter 26, “Bim Consultants Inc.”

Chapter 27, “Nerds Galore”

ERM and Risk MiniCase Studies: Part 2

Chapter 28, “The Reluctant General Counsel”

Sample Solution

mpany workers? The Gini coefficient for USA and UK, are 0.48, and 0.76, which indicates high-income inequality among workers. A significant reason for this is the increasing trend of excessive CEO compensation (Chetty et al., 2014). The Guardian (2018), reports that McDonald’s CEO, Steve Easterbrook, earned $21.7m while the McDonald’s workers earned a median wage of just $7,017 indicating a ratio of 3,101:1. Moreover, CEO Doug McMillon earned $19,177 in 2017 whereas, the average Walmart worker earned $19,177 in 2017, indicating a ratio of 1,188:1.

Apart from this, a problem with such high CEO compensation is that executives are being greedy and suggesting high risk-taking. According to a report from the Conference Board, in the 1990s, more than 80% of the rise in compensation for CEOs came from utilising the stock options. Therefore, compensating CEOs through stock options also results in the dilution of the company stock prices. Allocating a larger share to executives through stock options also creates a threat for financial crises for the business, and if the CEO does not perform well, he will still be receiving a generous sum of money through his share in the company stock (Murphy, 2013).

In consideration of this, it would be appropriate to develop and implement a salary cap to reduce the inequality of pay between executives and their employees. It is vital to measure critical performance metrics when considering increasing compensation. However, to do so, the organisational structure and the role of shareholders is critical. First, it would be essential to restrict CEOs from exploiting resources of the company and encourage the development of a transparent relationship between CEO and the board of directors. Also, in regards to extending the role of shareholders regarding the com

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