Provide a reflection of at least 500 words of how the knowledge, skills, or theories of this course “Enterprise Risk Management” have been applied, or could be applied, in a practical manner to your current work environment. I am currently working as a SharePoint developer. Demonstrate a connection to your current work environment. share times when you have or could observe these theories and knowledge could be applied to an employment opportunity in your field of study. The assignment asks that you reflect how the knowledge and skills obtained through meeting course objectives were applied or could be applied in the
Additional Praise for
Implementing Enterprise Risk Management
“Educators the world over seeking to make the management of risk an integral part
of management degrees have had great difficulties in providing their students with
a definitive ERM text for their course. The Standards and associated Handbooks
helped, but until the arrival of Implementing Enterprise Risk Management: Case Studies and Best Practices, there has been no text to enlighten students on the application
of an effective program to manage risk across an enterprise so that objectives are
maximized and threats minimized. Fraser, Simkins, and Narvaez have combined
with a group of contributors that represent the cream of risk practitioners, to provide the reader with a clear and concise journey through the management of risk
within a wide range of organizations and industries. The knowledge, skills, and
experience in the management of risk contained within the covers of this book are
second to none. It will provide a much needed resource to students and practitioners for many years to come and should become a well-used reference on the desk
of every manager of risk.”
—Kevin W. Knight AM, chairman, ISO/TC 262—Risk Management
“The authors—Fraser, Simkins, and Narvaez—have done an invaluable service to
advance the science of enterprise risk management by collecting an extensive number of wonderful case studies that describe innovative risk management practices
in a diverse set of companies around the world. This book should be an extremely
valuable source of knowledge for anyone interested in the emerging and evolving
field of risk management.”
—Robert S. Kaplan, senior fellow, Marvin Bower Professor of Leadership
Development, emeritus, Harvard University
“Lessons learned from case studies and best practices represent an efficient way
to gain practical insights on the implementation of ERM. Implementing Enterprise
Risk Management provides such insights from a robust collection of ERM programs across public companies and private organizations. I commend the editors
and contributors for making a significant contribution to ERM by sharing their
—James Lam, president, James Lam & Associates; director and Risk Oversight
Committee chairman, E∗ TRADE Financial Corporation;
author, Enterprise Risk Management—From Incentives to Controls
“For those who still think that enterprise risk management is just a fad, the varied
examples of practical value-generating uses contained in this book should dispel
any doubt that the discipline is here to stay! The broad collection of practices is
insightful for students, academics, and executives, as well as seasoned risk management professionals.”
—Carol Fox, ARM, director of Strategic and Enterprise Risk Practice, RIMS
“Managing risk across the enterprise is the new frontier of business management.
Doing so effectively, in my view, will be the single most important differentiating
factor for many enterprises in the twenty-first century. Implementing Enterprise Risk
Management: Case Studies and Best Practices is an innovative and important addition
to the literature and contains a wealth of insight in this critical area. This book’s
integration of theory with hands-on, real-world lessons in managing enterprise
risk provides an opportunity for its readers to gain insight and understanding that
could otherwise be acquired only through many years of hard-earned experience.
I highly recommend this book for use by executives, line managers, risk managers,
and business students alike.”
—Douglas F. Prawitt, professor of Accounting at Brigham Young University,
and Committee of Sponsoring Organizations (COSO)
Executive Board member
“The real beauty of and value in this book is its case study focus and the wide
variety of firms profiled and writers’ perspectives shared. This will provide readers
with a wealth of details and views that will help them chart an ERM journey of their
own that is more likely to fit the specific and typically customized ERM needs of
the firms for whom they toil.”
—Chris Mandel, senior vice president, Strategic Solutions for Sedgwick;
former president of the Risk Management Society
and the 2004 Risk Manager of the Year
“Implementing Enterprise Risk Management looks at many industries through excellent case studies, providing a real-world base for its recommendations and an
important reminder that ERM is valuable in many industries. I highly recommend
this text.”
—Russell Walker, Clinical associate professor, Kellogg School of Management;
author of Winning with Risk Management
“The body of knowledge in Implementing Enterprise Risk Management continues to
develop as business educators and leaders confront a complex and rapidly changing environment. This book provides a valuable resource for academics and practitioners in this dynamic area.”
—Mark L. Frigo, director, Strategic Risk Management Lab,
Kellstadt Graduate School of Business, DePaul University
“The management of enterprise risk is one of the most vexatious problems confronting boards and executives worldwide. This is why this latest book by Fraser,
Simkins, and Narvaez is a much needed and highly refreshing approach to the subject. The editors have managed to assemble an impressive list of contributors who,
through a series of fascinating real-life case studies, adroitly help educate readers
to better understand and deal with the myriad of risks that can assault, seriously
maim, and/or kill an organization. This is a ‘how to’ book written with the ‘risk
management problem solver’ in mind. It provides the link that has been missing
for effectively teaching ERM at the university and executive education levels and
it is an exceptional achievement by true risk management advocates.”
—Dr. Chris Bart, FCPA, founder and lead faculty,
The Directors College of Canada
“The Institute of Risk Management welcomes the publication of this highly practical text which should be of great interest to our students and members around the
world. Implementing Enterprise Risk Management brings together a fine collection of
detailed case studies from organizations of varying sizes and working in different sectors, all seeking to enhance their business performance by managing their
risks more effectively, from the boardroom to the shop floor. This book makes a
valuable contribution to the body of knowledge of what works that will benefit the
development of the risk profession.”
—Carolyn Williams, technical director, Institute of Risk Management
The Robert W. Kolb Series in Finance provides a comprehensive view of the field
of finance in all of its variety and complexity. The series is projected to include
approximately 65 volumes covering all major topics and specializations in finance,
ranging from investments, to corporate finance, to financial institutions. Each volume in the Kolb Series in Finance consists of new articles especially written for
the volume.
Each volume is edited by a specialist in a particular area of finance, who develops
the volume outline and commissions articles by the world’s experts in that particular field of finance. Each volume includes an editor’s introduction and approximately thirty articles to fully describe the current state of financial research and
practice in a particular area of finance.
The essays in each volume are intended for practicing finance professionals, graduate students, and advanced undergraduate students. The goal of each volume is
to encapsulate the current state of knowledge in a particular area of finance so that
the reader can quickly achieve a mastery of that special area of finance.
Case Studies and Best Practices
John R.S. Fraser
Betty J. Simkins
Kristina Narvaez
The Robert W. Kolb Series in Finance
Cover Design: Wiley
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Copyright © 2015 by John R.S. Fraser, Betty J. Simkins, Kristina Narvaev. All rights
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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10 9 8 7 6 5 4 3 2 1
To Wendy, my wonderful wife and my inspiration, and to my
parents who instilled in me a lifelong thirst for learning.
—John Fraser
To my husband (Russell) and our family: sons and daughtersin-law (Luke & Stephanie and Walt & Lauren), daughter and
son-in-law (Susan & Jason), and our youngest daughter (April).
Thank you for your love, support, and encouragement!
—Betty Simkins
I would like to thank my husband and four children for supporting me on my journey of writing two chapters and co-editing this
book. I would also like to thank the Risk and Insurance Management Society for supporting me during my educational years
and providing great workshops and conferences on enterprise
risk management.
—Kristina Narvaez
Enterprise Risk Management Case Studies:
An Introduction and Overview
John R.S. Fraser, Betty J. Simkins, and Kristina Narvaez
PART I Overview and Insights for Teaching ERM
An Innovative Method to Teaching Enterprise Risk
Management: A Learner-Centered Teaching Approach
David R. Lange and Betty J. Simkins
PART II ERM Implementation at Leading Organizations
ERM at Mars, Incorporated: ERM for Strategy
and Operations
Larry Warner
Value and Risk: Enterprise Risk Management at Statoil
Alf Alviniussen and Håkan Jankensgård
ERM in Practice at the University of California
Health System
Grace Crickette
Strategic Risk Management at the LEGO Group:
Integrating Strategy and Risk Management
Mark L. Frigo and Hans Læssøe
Turning the Organizational Pyramid Upside Down:
Ten Years of Evolution in Enterprise Risk Management
at United Grain Growers
John Bugalla
Housing Association Case Study of ERM in a
Changing Marketplace
John Hargreaves
Lessons from the Academy: ERM Implementation in
the University Setting
Anne E. Lundquist
Developing Accountability in Risk Management: The
British Columbia Lottery Corporation Case Study
Jacquetta C. M. Goy
Starting from Scratch: The Evolution of ERM at the
Workers’ Compensation Fund
Dan M. Hair
Measuring Performance at Intuit: A Value-Added
Component in ERM Programs
Janet Nasburg
TD Bank’s Approach to an Enterprise Risk
Management Program
Paul Cunha and Kristina Narvaez
PART III Linking ERM to Strategy and Strategic
Risk Management
A Strategic Approach to Enterprise Risk Management
at Zurich Insurance Group
Linda Conrad and Kristina Narvaez
Embedding ERM into Strategic Planning at the City
of Edmonton
Ken Baker
Leveraging ERM to Practice Strategic Risk Management
John Bugalla and James Kallman
Specialized Aspects of Risk Management
Developing a Strategic Risk Plan for the Hope City
Police Service
Andrew Graham
Blue Wood Chocolates
Stephen McPhie and Rick Nason
19 Kilgore Custom Milling
Rick Nason and Stephen McPhie
Implementing Risk Management within Middle
Eastern Oil and Gas Companies
Alexander Larsen
The Role of Root Cause Analysis in Public Safety
ERM Programs
Andrew Bent
JAA Inc.—A Case Study in Creating Value from
Uncertainty: Best Practices in Managing Risk
Julian du Plessis, Arnold Schanfield, and Alpaslan Menevse
Control Complacency: Rogue Trading
at Société Générale
Steve Lindo
The Role of VaR in Enterprise Risk Management:
Calculating Value at Risk for Portfolios Held by the
Vane Mallory Investment Bank
Allissa A. Lee and Betty J. Simkins
Uses of Efficient Frontier Analysis in Strategic Risk
Management: A Technical Examination
Ward Ching and Loren Nickel
PART V Mini-Cases on ERM and Risk
Bim Consultants Inc.
John R.S. Fraser
Nerds Galore
Rob Quail
The Reluctant General Counsel
Norman D. Marks
Transforming Risk Management at Akawini Copper
Grant Purdy
Alleged Corruption at Chessfield: Corporate
Governance and the Risk Oversight Role of the Board
of Directors
Richard Leblanc
Operational Risk Management Case Study:
Bon Boulangerie
Diana Del Bel Belluz
Other Case Studies
Constructive Dialogue and ERM: Lessons from the
Financial Crisis
Thomas H. Stanton
Challenges and Obstacles of ERM Implementation
in Poland
Zbigniew Krysiak and Slawomir
Turning Crisis into Opportunity: Building an ERM
Program at General Motors
Marc S. Robinson, Lisa M. Smith, and Brian D. Thelen
ERM at Malaysia’s Media Company Astro: Quickly
Implementing ERM and Using It to Assess the
Risk-Adjusted Performance of a Portfolio of Acquired
Foreign Companies
Patrick Adam K. Abdullah and Ghislain Giroux Dufort
About the Editors
nterprise Risk Management is an evolving discipline focused on a complex and still imperfectly-understood subject. In such a situation, science is
advanced best by collecting data from multiple, independent sites. A rich
set of observations educates the field’s scholars and practitioners and provides the
foundation for them to develop descriptive and normative theories as well as codified best practices about the subject.
The authors—Fraser, Simkins, and Narvaez—have done an invaluable service
to advance the science of enterprise risk management by collecting an extensive
number of wonderful case studies that describe innovative risk management practices in a diverse set of companies around the world. This book should be an
extremely valuable source of knowledge for anyone interested in the emerging
and evolving field of risk management. We should be grateful to the editors and
to each chapter author for expanding the body of knowledge for risk management
professionals and academics.
Robert S. Kaplan
Senior Fellow, Marvin Bower Professor
of Leadership Development, Emeritus
Harvard University
Enterprise Risk Management
Case Studies
An Introduction and Overview
Senior Vice President, Internal Audit, and former Chief Risk Officer, Hydro One
Networks Inc.
Williams Companies Chair of Business and Professor of Finance, Oklahoma State
President and Owner of ERM Strategies, LLC
Businesses, business schools, regulators, and the public are now scrambling to
catch up with the emerging field of enterprise risk management.
—Robert Kaplan (quote from Foreword in Fraser and Simkins, 2010)
Most executives with MBA degrees were not taught ERM. In fact, there are only
a few universities that teach ERM. So some business school graduates are strong
in finance, marketing, and management theory, but they are limited in terms of
critical thinking, business acumen, and risk analysis skills.
—Paul Walker1
Over the past two decades enterprise risk management (ERM) has evolved
from concepts and visions of how risks should be addressed to a methodology that is becoming entrenched in modern management and is now
increasingly expected by those in oversight roles (e.g., governing bodies and
regulators). As Felix Kloman describes in his chapter “A Brief History of Risk Management,” published in Fraser and Simkins (2010), many of the concepts go back
a very long time and many of the so-called newly discovered techniques can be
Implementing Enterprise Risk Management
referenced to the earlier writings and practices described by Kloman. However,
it is only from around the mid-1990s that the concept of giving a name to managing risks in a holistic way across the many operating silos of an enterprise started
to take hold. In the 1990s, terms such as integrated risk management and enterprisewide risk management were also used. Many thought leaders, for example, those
who created ISO 31000,2 believe that the term risk management is all that is needed
to describe good risk management; however, many others believe that the latter
term is often used to describe risk management at the lower levels of the organization and does not necessarily capture the concepts of enterprise-level approaches
to risk. As a result, the term ERM is used throughout this book.
As ERM continues to evolve there is still much discussion and confusion over
exactly what it is and how it should be achieved. It is important to realize that
it is still evolving and may take many more years before it is fully codified and
practiced in a consistent way. In fact, there is a grave danger now of believing
that there is only one way of doing ERM. This is probably a mistake by regulators who have too eagerly seized some of these concepts and are trying to impose
them when the methods are not fully understood, and in some cases the requirements are unlikely to produce the desired results. As Fraser and Simkins (2010)
noted in their first book on ERM: “While regulatory interest can force ERM into
companies, if not done well, it can become another box-ticking exercise that adds
little value.”3
The leading and most commonly agreed4 guideline to holistic risk management is ISO 31000. However, it should be mentioned that in the United States
the COSO 2004 Enterprise Risk Management–Integrated Framework has been the
dominant framework used to date. Many organizations are currently adopting
one or the other of these frameworks and then customizing them to their own
Following the success of the earlier Enterprise Risk Management: Today’s Leading
Research and Best Practices for Tomorrow’s Executives by Fraser and Simkins (2010),
we found through our own teaching experiences, and by talking to others, that
there was an urgent need for a university-level textbook of ERM case studies to
help educate executives, risk practitioners, academics, and students alike about
the evolving methodology. As a result, Fraser and Simkins, together with Kristina
Narvaez, approached many of the leading ERM specialists to write case studies for
this book.
Surveys have also shown that there is a dire need for more case studies on ERM
(see Fraser, Schoening-Thiessen, and Simkins 2008). Additionally, surveys of risk
executives report that business risk is increasing due to new technologies, faster
rate of change, increases in regulatory risk, and more (PWC 2014). As Paul Walker
of St. John’s University points out in the opening quote of the 2014 American Productivity & Quality Center (APQC) report on ERM, “Most executives with MBA
degrees were not taught ERM. In fact, there are only a few universities that teach
ERM. So some business school graduates are strong in finance, marketing, and
management theory, but they are limited in terms of critical thinking, business acumen, and risk analysis skills.” Learning Centered Teaching (LCT), as discussed in
Chapter 2, is an ideal way to achieve this. Using LCT and the case study approach,
students actively participate in the learning process through constructive reflective
reasoning, critical thinking and analysis, and discussion of key issues. This is the
first book to provide such a broad coverage of case studies on ERM.
The case studies that follow are from some of the leading academics and practitioners of enterprise risk management. While many of the cases are about real-life
situations, there are also those that, while based on real-life experiences, have had
names changed to maintain confidentiality or are composites of several situations.
We are deeply indebted to the authors and to the organizations that agreed so
kindly to share their stories to help benefit future generations of ERM practitioners. In addition, we have added several chapters where we feel the fundamentals
of these specialized techniques (e.g., VaR) deserve to be understood by ERM students and practitioners. Each case study provides opportunities for executives, risk
practitioners, and students to explore what went well, what could have been done
differently, and what lessons are to be learned.
Teachers of ERM will find a wealth of material to use in demonstrating ERM
principles to students. These can be used for term papers or class discussions, and
the approaches can be contrasted to emphasize different contexts that may require
customized approaches. This book introduces the reader to a wide range of concepts and techniques for managing risks in a holistic way, by correctly identifying
risks and prioritizing the appropriate responses. It offers a broad overview of the
various types of ERM techniques, the role of the board of directors, risk tolerances,
profiles, workshops, and allocation of resources, while focusing on the principles
that determine business success.
Practitioners interested in implementing ERM, enhancing their knowledge on
the subject, or wishing to mature their ERM program, will find this book an absolute must resource to have. Case studies are one of the best ways to learn more on
this topic.
This book is a companion to Enterprise Risk Management: Today’s Leading
Research and Best Practices for Tomorrow’s Executives (Fraser and Simkins 2010).
Together, these two books can create a curriculum of study for business students
and risk practitioners who desire to have a better understanding of the world of
enterprise risk management and where it is heading in the future. Boards and
senior leadership teams in progressive organizations are now engaging in building
ERM into their scenario-planning and decision-making processes. These forwardlooking organizations are also integrating ERM into the business-planning process with resource allocation and investment decisions. At the business unit
level, ERM is being used to measure the performance of risk-taking activities of
As these case studies demonstrate, ERM is a continuous improvement process
and takes time to evolve. As can be gleaned from these case studies, most firms that
have taken the ERM journey started with a basic ERM language, risk identification,
and risk-assessment process and then moved down the road to broaden their programs to include risk treatments, monitoring, and reporting processes. The ultimate goal of ERM is to have it embedded into the risk culture of the organization
and drive the decision-making process to make more sound business decisions.
Implementing Enterprise Risk Management
As mentioned earlier, the purpose of this book is to provide case studies on ERM
in order to educate executives, risk practitioners, academics, and students alike
about this evolving methodology. To achieve this goal, the book is organized into
the following sections:
Part I: Overview and Insights for Teaching ERM
Part II: ERM Implementation at Leading Organizations
Part III: Linking ERM to Strategy and Strategic Risk Management
Part IV: Specialized Aspects of Risk Management
Part V: Mini-Cases on ERM and Risk
Part VI: Other Case Studies
Brief descriptions of the contributors and the chapters are provided next.
The first two chapters provide an overview of ERM and guidance on ERM education. As we have pointed out, education on ERM is crucial and more universities
need to offer courses in this area. Our conversations with many ERM educators
and consultants highlight how extremely challenging it is to achieve excellence in
ERM education.
Chapter 2, “An Innovative Method to Teaching Enterprise Risk Management: A Learner-Centered Teaching Approach,” offers insights and suggestions
on teaching ERM. This chapter covers the concept of flipping the classroom with
learner-centered teaching (LCT), distinguishes it from traditional lectures, and
describes how it can be used in teaching ERM. The LCT approach emphasizes
active student participation and collaboration on in-class activities such as case
studies versus the traditional lecture approach. This chapter provides several
examples as to how LCT can be applied in teaching ERM, utilizing Fraser and
Simkins’ (2010) book. David R. Lange and Betty J. Simkins, both experienced ERM
educators, team together to write this chapter. David Lange, DBA, is an Auburn
University Montgomery (AUM) Distinguished Research and Teaching Professor of
Finance. He has received many prestigious awards for both research and teaching
from the University and from several academic associations. He has taught many
courses in the area of risk management and has consulted in a significant number of individual and class insurance–related cases in both state and federal court.
Betty Simkins, PhD, the Williams Companies Chair of Business and Professor of
Finance at Oklahoma State University, is coeditor of this book.
Part II is a collection of ERM case studies that give examples of how ERM was
developed and applied in major organizations around the world. Note that there
is no perfect ERM case study and the objective is for readers to assess what they
believe was successful or not so successful about these ERM programs.
The first case study in this book describes ERM at Mars, Inc. Larry Warner, who
is the former corporate risk manager at Mars, Inc. and now is president of Warner
Risk Group, describes the ERM program at the company in Chapter 3. Mars is
a global food company and one of the largest privately held corporations in the
United States. It has more than 72,000 associates and annual net sales in excess
of $33 billion across six business segments—Petcare, Chocolate, Wrigley, Food,
Drinks, and Symbioscience. Its brands include Pedigree, Royal Canin, M&M’s,
Snickers, Extra, Skittles, Uncle Ben’s, and Flavia. With such complex business operations, Mars recognized the importance of providing its managers with a tool to
knowledgably and comfortably take risk in order to achieve its long-term goals.
Mars business units use its award-winning process to test their annual operating
plan and thereby increase the probability of achieving these objectives.
The case study in Chapter 4 entitled “Value and Risk: ERM in Statoil” was written by Alf Alviniussen, who is the former Group Treasurer and Senior Vice President of Norsk Hydro ASA, Oslo, Norway, and Håkan Jankensgård who holds
a PhD in risk management from Lund University, Sweden. Håkan is also a former risk manager of Norsk Hydro. In this case study, the authors discuss ERM at
Statoil, one of the top oil and gas companies in the world, located in Norway. In
Statoil, understanding and managing risk is today considered a core value of the
company, which is written into the corporate directives and widely communicated
to employees. ERM is thoroughly embedded in the organization’s work processes,
and its risk committee has managed the transition from a “silo”-mentality to promoting Statoil’s best interests in areas where risk needs to be considered.
Chapter 5, called “ERM in Practice at University of California Health Systems,”
is written by their former Chief Risk Officer (CRO), Grace Crickette, who is now
the Senior Vice President and Chief Risk and Compliance Officer of AAA Northern
California, Nevada, and Utah. The University of California’s (UC) Health System
is comprised of numerous clinical operations, including five medical centers that
support the clinical teaching programs for the university’s medical and health science school and handle more than three million patient visits each year. ERM plays
an important role at the UC Health System and assists the organization in assessing and responding to all risks (operational, clinical, business, accreditation, and
regulatory) that affect the achievement of the strategic and financial objectives of
the UC Health System.
The descriptive case study in Chapter 6, written by Dr. Mark Frigo from
DePaul University and Hans Læssøe, the Strategic Risk Manager of the LEGO
Group, provides a great example of integrating risk management in strategy development and strategy execution at the LEGO Group, which is based on an initiative
started in late 2006 and led by co-author Hans Læssøe. The LEGO methodology is
also part of the continuing work of the Strategic Risk Management Lab at DePaul
University, which is identifying and developing leading practices in integrating
risk management with strategy development and execution.
United Grain Growers (UGG), a conservative 100-year-old Winnipeg, Canadabased grain handler and distributor of farm supplies, was an ERM pioneer. Chapter 7 called “Turning the Organizational Pyramid Upside Down: Ten Years of Evolution in Enterprise Risk Management at United Grain Growers” analyzes the ERM
program at United Grain Growers 15 years later. When UGG announced that it
had implemented a new integrated risk-financing program in 1999, it received
a great deal of attention in the financial press. CFO magazine hailed the UGG
Implementing Enterprise Risk Management
program as “the deal of the decade.” The Economist characterized it as a “revolutionary advance in corporate finance,” and Harvard University created a UGG
case study. While most outside attention focused on the direct financial benefits
of implementing the program (protection of cash flow, the reduced risk-capital
required, and a 20 percent increase in stock price), scant attention was given to the
less tangible and therefore less measurable issues of governance, leadership, and
corporate culture—the conditions that enabled such innovation. It was a combination of a collaborative leadership open to new ideas, a culture of controlled risk
taking, and active risk oversight by the board that produced a strategic approach
to UGG’s risk management process. This chapter is written by John Bugalla, who
is the principal of ermINSIGHTS.
John Hargreaves has written Chapter 8 titled “Housing Association Case
Study of ERM in a Changing Marketplace.” He has a mathematics degree from
Cambridge University and six years strategy consultancy experience at KPMG.
This case study features four real-life charitable housing associations in England
and Wales, each with a different strategy and risk environment. Simple yet practical tools to assist in risk identification and prioritization are also presented. This
case study has two main aims. The first is to help develop an understanding of
the importance of ERM in a charitable context, showing that modern charities are
often very active organizations that face significant risks. Second, the case aims to
illustrate the need for a close relationship between risk assessment and strategy
development, particularly in sectors where objectives are defined in social as well
as economic terms. Each of the four cases has a different perspective and challenges
the student or practitioner to identify and assess the risk and develop possible risk
treatments for each.
Chapter 9, “Lessons from the Academy: ERM Implementation in the University Setting,” was written by Anne E. Lundquist. She is pursuing a PhD in the
Educational Leadership program at Western Michigan University with a concentration in Higher Education Administration. This chapter explores the unique
aspects of the University of Washington’s (UW) risk environment, including how
leadership, goal-setting, planning, and decision-making differ from the for-profit
sector. The lack of risk management regulatory requirements, combined with cultural and environmental differences, helps explain why there are a limited number
of fully evolved ERM programs at colleges and universities. The second half of the
chapter explores the decision to adopt and implement ERM at UW, including a
description of early decisions, a timeline of how the program evolved, a discussion of the ERM framework, and examples of some of the tools used in the risk
management process. It traces the evolution of the UW program as well as demonstrates decisions that administrators made to tailor ERM to fit the decentralized
culture of a university.
The case study in Chapter 10, “Developing Accountability in Risk Management: The British Columbia Lottery Corporation Case Study,” demonstrates how
ERM was successfully implemented in a Canadian public sector organization over
a 10-year period. Jacquetta Goy, author of this chapter, was the Senior Manager,
Risk Advisory Services at British Columbia Lottery Corporation and was responsible for establishing and developing the ERM program. Currently, Jacquetta is
the Director of Risk Management at Thompson Rivers University, Canada. This
case study focuses on initiation, early development, and sustainment of the ERM
program, highlighting some of the barriers and enablers that affected implementation. This case study includes a focus on developing risk profiles; the role of
risk managers, champions, and committees; and the development of effective risk
evaluation tools. The approach to ERM has evolved from informal conversations
supported by an external assessment, through a period of high-level corporate
focus supported by a dedicated group of champions using voting technology to
an embedded approach, where risk assessment is incorporated into both operational practice and planning.
Chapter 11, “Starting from Scratch: The Evolution of ERM at the Workers Compensation Fund,” describes the evolution of a formal ERM program at a midsize
property casualty insurance carrier. This chapter is authored by Dan Hair, the CRO
of the Workers Compensation Fund. In this chapter, the motivations of executive
management and the board of directors in taking existing strategic risk management discussions to a higher level are reviewed. The step-by-step actions taken by
the company to develop the ERM program are explained in chronological order.
External resources used are also commented upon. The chapter concludes with a
discussion of striking an ongoing balance between program rigor, documentation,
and business needs.
Chapter 12, “Measuring Performance at Intuit: A Value-Added Component
in ERM Programs,” shows how Intuit, maker of Quicken, QuickBooks, and TurboTax, is committed to creating new and easier ways for consumers and businesses to
tackle life’s financial chores, giving them more time to live their lives and
run their businesses. This case study shows how Intuit, a global company, is
exposed to a wide range of customer-related and operational risks. Understanding the risk landscape enables Intuit to formulate and execute strategies to address
potential pitfalls and opportunities. The author, Janet Nasburg, is Chief Risk Officer at Intuit. Janet is responsible for driving Intuit’s ERM capability, ensuring that
the company appropriately balances opportunities and risks to achieve optimal
business results. Before Intuit, Janet spent 16 years in various finance roles at Visa,
and has more than 30 years of risk management and finance experience.
Chapter 13 describes TD Bank’s ERM program and how it has been developed
to reinforce the risk culture and ensure that all stakeholders have a common understanding of how risks are addressed within the organization. This is achieved by
identifying the risks to TD Bank’s business strategy and operations, determining
the types of risk it is prepared to take, establishing policies and practices to govern risks, and following an ERM framework to manage those risks. This chapter is
co-authored by Paul Cunha and Kristina Narvaez. Paul Cunha is Vice President,
Enterprise Risk Management at TD Bank. During his career at TD Bank, he has
spent time in risk management, internal audit, retail banking, commercial banking, and corporate and investment banking. Kristina Narvaez is the president and
owner of ERM Strategies, LLC, and is co-editor of this book.
Part III of this book demonstrates the link between ERM and strategy in what is
now being called strategic risk management (SRM). SRM represents an important
evolution in enterprise risk management, shifting from a reactive approach to a
Implementing Enterprise Risk Management
proactive approach in dealing with the large spectrum of risks across the organization. These case studies view their risk-taking activities in a strategic way, not
only to protect the organization’s value and assets, but also to be able to capture
new value that is in alignment with the strategic goals of the organization.
Zurich Insurance Group, the case study in Chapter 14, demonstrates the link
between ERM and strategy. Zurich is a global insurance carrier and is exposed to
a wide range of risks. Zurich recognizes that taking the right risks is a necessary
part of growing and protecting shareholder value. It is careful not to miss valuable market opportunities that could attract the best talent and investor capital, but
must also balance the growth opportunities with the reality that it is operating in
a complex world economy. This chapter is co-authored by Linda Conrad, Director
of Strategic Business Risk Management at Zurich and Kristina Narvaez, president
and owner of ERM Strategies, LLC and co-editor of this book. Linda leads a global
team responsible for delivering tactical solutions to Zurich and to its customers on
strategic issues such as business resilience, supply chain risk, ERM, risk culture,
and total risk profiling.
Chapter 15, “Embedding ERM into Strategic Planning at the City of Edmonton,” is written by Ken Baker, who is their ERM Program Manager. This study
examines the process used by the City of Edmonton in Alberta, Canada, to establish its strategic ERM model. After examining several existing frameworks, the
City decided on a framework based on the ISO 31000 risk management standard,
but customized to suit the City’s needs. During the process, administration had
to weigh factors common to any large organization, as well as those specific to
governments in general and municipalities in particular. The chronicling of this
process may assist those in similar organizations to more successfully implement
their own ERM and SRM programs.
Chapter 16 describes a brief history of the evolution of enterprise risk
management and describes a new and innovative approach (value mapping) to
measuring the potential value by taking risks. This chapter also provides a model
for incorporating the ERM process into strategic planning. John Bugalla, Principal
of ermINSIGHTS and author of Chapter 7, and James Kallman, a finance professor
at St. Edward’s University, co-author this chapter. John’s experience includes
30 years in the risk management profession serving as Managing Director of
Marsh & McLennan, Inc., Willis Group, Plc., and Aon Corp., before founding
ermINSIGHTS. James teaches courses in finance, statistics, and risk management.
Part IV of the book captures unique aspects of ERM so that the reader can learn
about the many broad applications, including insights into managing specific
types of risk. This part starts with a case study in Chapter 17 of the challenges
of risk management within a typical police department. This case is followed by
eight additional chapters addressing other intriguing aspects of risk management.
Andrew Graham reveals the complex and challenging aspects of risk management in Chapter 17, “Developing a Strategic Risk Plan for the Hope City Police Service.” This fictional case study was developed based on many years of teaching risk
management to police forces. The setting is a medium-sized but growing city that
is facing many issues, including changes in demographics, traffic issues, budgetary
challenges, and so on. The student is required to act as a consultant who has been
hired by the chief of police to assist him in briefing the Police Services Board and the
mayor in understanding the most critical risks to their objective of having a bestin-class police service for their citizens. Andrew Graham researches, teaches, and
writes on public-sector management, financial management, integrated risk management, and governance at Queen’s University School of Policy Studies, Canada,
as well as a variety of international and Canadian venues. Andrew had an extensive career in Canada’s criminal justice system and has taught and worked with
police services and police boards and commissioners in a variety of ways for the
past 10 years.
Chapter 18, “Blue Wood Chocolates,” is designed to facilitate discussion of the
implementation of an ERM framework, corporate governance issues, and commodity risk management. The situation that this fictional company faces is typical of many midsize companies that have performed satisfactorily in the past but
are exposed, often unknowingly, to major potential risks and do not have the
internal governance and risk management structures to identify, quantify, and
manage such risks adequately. In particular, this case illustrates commodity and
foreign currency exposures, and challenges the student to investigate the specifics
of hedging such positions. Rick Nason, PhD, CFA, and Stephen McPhie, CA, coauthored this chapter. Rick is an associate professor of finance at Dalhousie University, Canada, and is also a founding partner of RSD Solutions, a risk management
consultancy firm. His coauthor, Stephen McPhie, CA, is a partner of RSD Solutions Inc. and has also held various positions in the United States, Canada, and the
United Kingdom with a major Canadian bank.
Foreign exchange (FX) risk management is one of the greatest financial risks a
company faces when expanding globally. Chapter 19, “Kilgore Custom Milling,”
illuminates the myriad of issues that arise when hedging FX risk, such as faced by
a midsize original equipment manufacturer (OEM) operating in the automobile
industry. Kilgore Custom Milling (a fictional company) needs to develop a hedging strategy to manage its foreign exchange risk for a new contract and decide what
type of derivatives to use, what size of hedge to implement, and how the company’s financial risk management fits in with its overall ERM process. Rick Nason
and Stephen McPhie, coauthors of Chapter 18, team together again to explore the
complex and challenging issues that many companies face with FX risk.
ERM is currently of very high interest to companies operating in the Middle East, an area that presents unique challenges for implementation. Alexander
Larsen captures this scenario in Chapter 20, “Implementing Risk Management
within Middle Eastern Oil and Gas Companies.” This case study is based on reallife examples of Middle Eastern oil and gas companies and captures the challenges
of implementing risk management in the Middle East. Alexander Larsen holds a
degree in risk management from Glasgow Caledonian University and is a Fellow
of the Institute of Risk Management. He has over 10 years of experience across a
wide range of sectors, including oil and gas, construction, utilities, finance, and the
public sector. Alexander has considerable expertise in training and working with
organizations to develop, enhance, and embed their ERM.
Public safety organizations are increasingly adopting sophisticated enterprise
governance and risk management techniques as a means of managing their
Implementing Enterprise Risk Management
programs and expenditures. Root cause analysis can provide these agencies with
detailed insights into the problems and issues they face, and provide them with
the information they need to make informed decisions on risk management.
Chapter 21, “The Role of Root Cause Analysis in Public Safety ERM Programs,”
explores these issues by presenting six common root cause analysis techniques
that are applied in a public safety or law enforcement environment. The chapter
author, Andrew Bent, is a practicing risk manager with a large Canadian integrated energy company and was previously in charge of ERM for one of Canada’s
largest municipal police services.
Chapter 22, “JAA Inc.—A Case Study in Creating Value from Uncertainty: Best
Practices in Managing Risk,” provides extensive details about ERM implementation in a fictional international organization and discusses topics including governance structure, the processes, and the various tools used. The case is built on the
principles and guidance of ISO 31000 and the implementation guidance created
by The Australian and New Zealand Hand Book HB 436. This case emphasizes the
roles of the heads of the internal audit function and the risk management function. The three coauthors of this chapter have extensive experience in risk management. Julian du Plessis, Head of Internal Audit at AVBOB Mutual Assurance
Society, South Africa, has over eight years of financial sector experience. Arnold
Schanfield is a Principal with Schanfield Risk Management Advisors LLC, and is an
internal audit and risk professional with diversified industry expertise. Alpaslan
Menevse is currently the Risk Officer at Sekerbank T.A.S., which has in excess of
310 branches in Turkey. He has 28 years of experience in information systems, both
as an academic and as a practitioner.
A book on ERM case studies is not complete without some coverage of
risk management failures. One of the most famous failures involving operational risk is discussed in Chapter 23, “Control Complacency: Rogue Trading
at Société Générale.” In January 2008, Société Générale uncovered €49 billion of
unauthorized equity positions at its Paris head office, which cost €4.9 billion to
unwind. Using an interactive format, this case study analyzes the origins, actors,
causes, and consequences of this notorious control breakdown and derives risk
management lessons from it in the areas of corporate governance, controls, compliance, systems, technology, and reputation risk. The author, Steve Lindo, Principal, SRL Advisory Services, has many years of experience in ERM and provides a
thorough and fascinating coverage of this disaster.
Value at risk (VaR) is one of the most widely used techniques to measure
financial risks, particularly in the area of investment portfolios. However, it is a
technique that has not been fully understood by many risk managers. In Chapter
24, “The Role of VaR in Enterprise Risk Management: Calculating Value at Risk
for Portfolios Held by the Vane Mallory Investment Bank,” VaR is described along
with its underlying assumptions, advantages, and disadvantages. Several examples for single assets are detailed for both the dollar and percentage VaR estimation
methods. The main focus of this case study is a tutorial on calculating VaR for portfolios of assets using the covariance approach utilized in portfolio theory. Allissa
A. Lee coauthored this case study with Betty J. Simkins. Allissa is an assistant
professor of finance in the College of Business Administration at Georgia Southern University. She has published several academic articles and also worked
in the mortgage industry for MidFirst Bank. Betty, coeditor of this book, is the
Williams Companies Chair of Business and Professor of Finance at Oklahoma
State University.
Chapter 25, “Uses of Efficient Frontier Analysis in Strategic Risk Management,” covers an advanced analytical technique, efficient frontier analysis (EFA),
where complex property and casualty risk profiles are being considered. This chapter provides insights into risk portfolio volatility, pricing, and insurance layering
efficiency using EFA and is applied to a risk portfolio that presents catastrophic
loss potential within the context of strategic risk management. This chapter’s coauthors are Ward Ching, who is Vice President, Risk Management Operations, at
Safeway Inc., and Loren Nickel, who is Regional Director and Actuary, Actuarial
and Analytics Practice, at Aon Global Risk Consulting. Both authors have extensive
experience in property and casuality risk management and share their expertise in
this specialized topic of ERM.
Mini-cases are a very powerful and highly useful resource in teaching ERM and
can be easily utilized in short time periods such as a one-hour class segment. This
part fills this gap in the education literature on ERM and includes six fictional minicases that have been developed by leading risk practitioners who draw from the
wealth of their experiences in various applications of risk management.
Chapter 26, “Bim Consultants Inc.,” is based on a real event in which a
company was faced with an important strategic acquisition decision. All names
and data have been changed for confidentially reasons. The purpose of the case is
to illustrate the complexity of making strategic decisions and how greed and ego
can cause a firm to change strategy that may put the business at risk. The author,
John Fraser, Senior Vice President, Internal Audit, and former Chief Risk Officer
of Hydro One Networks Inc., is also coeditor of this book. Fraser is currently
an adjunct professor at York University, Canada, and a member of the faculty
of the Directors College. He is a recognized authority on ERM and has written
extensively on the topic.
Chapter 27, “Nerds Galore,” is based on a fictitious small services company
that appears to be on the verge of a major downturn. The focus of the case study is
human resources–related risks, and the exercise is to conduct a risk assessment to
aid in making the decision on whether to proceed with a major human resources
strategy. This case study could be used as the basis for an actual risk workshop simulation with students role-playing various positions on the management team. Rob
Quail, the author of this case study, draws on his extensive experience as Director
of ERM at Hydro One Networks Inc., and provides an excellent mini-case to illuminate ERM applications.
Can a company have a successful ERM program that does not involve a key
function, such as the legal department? And if not willing to participate, how do
you convince this department to commit to ERM? The reader is challenged with
tackling this crucial issue in Chapter 28, “The Reluctant General Counsel.” This
mini-case is about the implementation of ERM at a software company and illustrates the challenges faced when the general counsel of the company has reservations and is not willing to support the implementation. The author, Norman
Marks, CPA, CRMA, has been chief audit executive of major global corporations
Implementing Enterprise Risk Management
for over 20 years, and is highly regarded in the global profession of internal auditing. Furthermore, he is a prolific blogger about internal audit, risk management,
governance, and compliance.
Chapter 29, “Transforming Risk Management at Akawini Copper,” describes
how the approach to managing risk can be transformed and enhanced in a company. The case study is based on a hypothetical mining company, Akawini Copper,
that has recently been acquired by an international concern. It draws on the practical concepts of ISO 31000 to show how a weak approach to risk management can be
enhanced to be more robust and comprehensive by following a logical framework
and transformation plan. The author, Grant Purdy, has worked in risk management for more than 35 years, across a wide range of industries and in more than
25 countries. Grant is coauthor of the 2004 version of AS/NZS 4360 and also of
AS/NZS 5050, a standard for managing disruption-related risk, and has also written many risk management handbooks and guides.
Richard Leblanc, PhD, who is a governance lawyer, certified management consultant, and Associate Professor of Law, Governance, and Ethics at York University, draws on his extensive experience in board of director effectiveness when
writing Chapter 30, “Alleged Corruption at Chessfield: Corporate Governance and
the Risk Oversight Role of the Board of Directors.” Richard has advised regulators on corporate governance guidelines, and, as part of his external professional
activities, has served as an external board evaluator and governance adviser for
many companies, as well as in an expert witness capacity in litigation concerning
corporate governance reforms. This case deals with the inner workings of a large
organization’s board of directors, including allegations of alleged corruption and
self-dealing, and provides the reader with a captivating application of risk management shortcomings in governance and internal controls.
Diana Del Bel Belluz, president and founder of Risk Wise, Inc., draws on her
experience in operational risk when writing Chapter 31, “Operational Risk Management Case Study: Bon Boulangerie.” This mini-case provides the opportunity
for students to discuss and present their knowledge of operational risk. It describes
the challenges and opportunities faced by a fictional bakery business in a small
city. The bakery’s owner has decided to expand the business for greater rewards,
but in doing so is faced with a number of operational challenges. Additional information on the steps of operational risk management is available in Chapter 16 in
Fraser and Simkins (2010). Diana has many years of consulting experience in ERM,
and advances the practice of ERM through her thought leadership as an educator,
conference organizer, speaker, and author of ERM resources.
Many risk management lessons can be learned from the financial crisis of 2008,
and we begin this part with a chapter addressing this topic: Chapter 32, “Constructive Dialogue and ERM: Lessons from the Financial Crisis.” In this chapter,
Tom Stanton eloquently examines the critical distinctive factors between successful and unsuccessful firms in the crisis and refers to the presence or absence of
these factors as constructive dialogue. Successful firms managed to create productive and constructive tension between those in the firm who wanted to do deals or
offer certain financial products and services and those who were responsible for
limiting risk exposures. Instead of simply deciding to do a deal or not, successful
firms considered ways to hedge risks or otherwise reduce exposure from doing
the deal. Thomas H. Stanton is a Fellow of the Center for Advanced Governmental Studies at Johns Hopkins University, a director of the Association of Federal
Enterprise Risk Management, a former director of the National Academy of Public
Administration, and a former member of the federal Senior Executive Service.
An important objective in this book is to provide global coverage about ERM
by including insightful applications in various countries. Poland, after the transition into the free market economy in 1989, became open to knowledge and transfer
of the best practices from around the world. Chapter 33, “Challenges and Obstacles
of ERM Implementation in Poland,” draws on years of research, both formal and
informal, and documents the country’s first approaches to ERM implementation.
The successes, challenges, and weaknesses are described and provide a valuable
lesson for other countries, regions, or even organizations in how they might go
about implementing ERM. Two experts on ERM implementation in Poland teamed
together to write this chapter. Zbigniew Krysiak, PhD, is an associate professor of
finance at the Warsaw School of Economics in Poland. He is the author or coauthor of more than 100 publications, intended both for practitioners and for the academic community, concerning finance, risk management, financial engineering,
Pijanowski, PhD, is president of the POLand banking. His coauthor, Slawomir
RISK Risk Management Association in Poland, where he is responsible for development of good risk management practices for the Polish market. He is coauthor
of the Polish book titled Risk Management for Sustainable Business published by the
Polish Ministry of the Economy and has many other accomplishments in the area
of risk management.
Chapter 34 entitled “Turning Crisis into Opportunity: Building an ERM Program at General Motors” was written by leaders of ERM at GM—Marc Robinson,
Lisa Smith, and Brian Thelen. This case study chronicles the ground-up implementation of ERM at General Motors Company (GM), starting in 2010 after it emerged
from bankruptcy. While GM recognizes that its ERM is a work in progress, there
have been important successes both in improving the management of risk and
making better business decisions. Critical to these successes has been a clear strategic vision on adding value for the business leaders that are the true risk owners,
unique decision tools such as game theory, and a continuous improvement mindset, including robust lessons learned. The study describes the lessons learned during implementation and some of the unique approaches, tools, and techniques that
GM has employed. Examples of senior management reporting are also included.
The last case study in the book is also extremely insightful because it provides
an excellent example of an ERM application at a company in Asia. The authors
demonstrate in Chapter 35 how Astro, a Malaysia-based media company, uses
ERM to grow through international acquisitions, and how it implements enterprise risk management not only to ensure sound risk management by its foreign
subsidiaries and joint ventures, but also to make better risk/return decisions on
its portfolio of direct investments. Both authors are authorities on ERM implementation globally. Ghislain Giroux Dufort is President of Baldwin Risk Strategies Inc., a consulting firm advising boards of directors and management teams
on risk governance and ERM and has over 25 years of experience. Patrick Adam
Kanagaratnam Abdullah is the Vice President of ERM for Astro Overseas Limited
Implementing Enterprise Risk Management
(AOL), Malaysia. He specializes in the implementation of ERM practices across
AOL’s investments and has over 21 years of experience in various areas of risk
As outlined above, the case studies and specialized topic chapters in this book
present an impressive coverage of new information on enterprise risk management, and all chapters are written by leading ERM experts globally. To our
knowledge, this is the first book to be published that provides such comprehensive
coverage of ERM case studies. We hope you find this book a valuable resource in
your education and/or implementation of ERM. We welcome your comments and
suggestions. Answers to the end-of-chapter questions and detailed teaching notes
to most cases are available to instructors at
1. See the 2014 American Productivity & Quality Center Report.
2. ISO 31000 was issued by the International Standards Organization in 2009. For a description refer to Chapter 7 of Fraser/Simkins by John Shortreed.
3. Fraser/Simkins, 15.
4. ISO 31000 has been agreed to by about 25 major countries of the international community
as the guideline for risk management.
American Productivity & Quality Center (APQC). 2014. APQC Report.
Fraser, John, and Betty J. Simkins, eds. 2010. Enterprise Risk Management: Today’s Leading
Research and Best Practices for Tomorrow’s Executives. Hoboken, NJ: John Wiley & Sons.
Fraser, John, Karen Schoening-Thiessen, and Betty J. Simkins. 2008. “Who Reads What Most
Often? A Survey of Enterprise Risk Management Literature Read by Risk Executives.”
Journal of Applied Finance 18:1 (Spring/Summer).
PWC (PricewaterhouseCoopers). 2014. Risk in Review: Re-Evaluating How Your Company
Addresses Risk.
John R.S. Fraser is the Senior Vice-President, Internal Audit, and former Chief Risk
Officer of Hydro One Networks Inc., Canada, one of North America’s largest electricity transmission and distribution companies. He is a Fellow of the Institute of
Chartered Accountants of Ontario, a Fellow of the Association of Chartered Certified Accountants (U.K.), a Certified Internal Auditor, and a Certified Information Systems Auditor. He has over 30 years of experience in the risk and control
field mostly in the financial services sector, including areas such as finance, fraud,
derivatives, safety, environmental, computers, and operations. He is a member
of the Faculty at the Directors College for the Strategic Risk Oversight Program,
and has developed and teaches a master’s degree course entitled Enterprise Risk
Management in the Masters in Financial Accountability Program at York University where he is an adjunct professor. He is a recognized authority on enterprise
risk management and has co-authored several academic papers on ERM. He is coeditor of a best-selling university textbook released in 2010, Enterprise Risk Management: Today’s Leading Research and Best Practices for Tomorrow’s Executives.
Betty J. Simkins, PhD, is Williams Companies Chair of Business and Professor of
Finance at Oklahoma State University. Betty received her PhD from Case Western
Reserve University. She has had more than 50 publications in academic finance
journals. She has won awards for her teaching, research, and outreach, including
the top awards at Oklahoma States University: Regents Distinguished Research
Award and Outreach Excellence Award. Her primary areas of research are risk
management, energy finance, and corporate governance. Betty serves on the editorial boards of nine academic journals, including the Journal of Banking and Finance;
is past coeditor of the Journal of Applied Finance; and is past president of the Eastern Finance Association. She also serves on the Executive Advisory Committee of
the Conference Board of Canada’s Strategic Risk Council. In addition to this book,
she has published two others: Energy Finance and Economics: Analysis and Valuation,
Risk Management and the Future of Energy and Enterprise Risk Management: Today’s
Leading Research and Best Practices for Tomorrow’s Executives (co-edited with John
Fraser). Prior to entering academia, she worked in the corporate world for ConocoPhillips and Williams Companies. She conducts executive education courses for
companies globally.
Kristina Narvaez is the president and owner of ERM Strategies, LLC (, which offers ERM research and training to organizations on various ERM-related topics. She graduated from the University of Utah in environmental risk management and then received her MBA from Westminster College. She
is a two-time Spencer Education Foundation Graduate Scholar from the Risk and
Insurance Management Society and has published more than 25 articles relating
to enterprise risk management and board risk governance. She has given many
presentations to various risk management associations on topics of ERM. She is
an adjunct professor at Brigham Young University, teaching a business strategy
course for undergraduates.
Overview and Insights for
Teaching ERM
An Innovative Method
to Teaching Enterprise
Risk Management
A Learner-Centered Teaching Approach
Distinguished Research and Teaching Professor of Finance, Auburn University
Williams Companies Chair of Business and Professor of Finance, Oklahoma State
earner-centered teaching (LCT), commonly referred to as “flipping the classroom” (Shibley and Wilson 2012), is an alternative to the traditional teacher
lecture (TL). With LCT, students actively participate in the pedagogical process and take increased responsibility for learning through constructive reflective
reasoning. Where with TL content is covered, content in LCT is used as a “means
to learning” (Weimer 2002). LCT is ideally suited for content provided in lists,
tables, charts, and exhibits, and particularly so if these are in the form of topic
overviews, flowcharts, or summaries. The case method espouses similar studentengaged learning processes by promoting critical thinking and analysis, creating
discussion of conflicting issues and requiring a decision (Bean 2011). LCT amplifies and broadens student learning from cases. Hence, the case studies in this book
are ideal for teaching enterprise risk management (ERM) using LCT.
The chapter is presented in three sections. The first section clarifies the concept
of flipping the classroom with LCT, distinguishing LCT from a TL, and why the
growing LCT movement should be joined. The second section considers the
what, Weimer’s (2002) Learner Centered Teaching “Five Key Changes to Practice,” a
definitive paradigm for changing pedagogy to LCT from a TL. A final section, the
appendix, provides examples of how, using content to utilize LCT in an enterprise
risk management (ERM) course at Auburn University Montgomery. The examples
are from Enterprise Risk Management: Today’s Leading Research and Best Practices
for Tomorrow’s Executives (Fraser and Simkins 2010), which opportunely provides
ERM content in the supporting formats. The LCT examples are provided in
Implementing Enterprise Risk Management
Exhibit 2.1 TL versus LCT
Bloom (1956)
Anderson and Krathwohl
Remember: Recognize, recall
Understand: Interpret, explain
Apply: Calculate, solve
Analyze: Distinguish, relate
Evaluate: Critique, test
Create: Hypothesize, devise
Memorize, recollect, retain
Comprehend, realize, apprehend
Compute, estimate, determine
Examine, explore, study, associate
Assess, appraise, review, comment
Speculate, theorize, postulate, offer,
imagine, assume, suggest
contrast to TL approaches, and include learning notes expanding the how of
Flipping the classroom refers to Bloom’s Cognitive Learning Taxonomy (1956), a
commonly accepted identification of levels of learning (Anderson and Krathwohl
2001; Bean 2011; Shibley and Wilson 2012), and thus an easily identifiable model
with which to distinguish LCT from TL. Exhibit 2.1 has inverted Bloom’s taxonomy to illustrate flipping the classroom. In a TL, the teacher normally progresses
through the taxonomy starting with imparting knowledge:
r Knowledge: covering content with PowerPoint presentations, lecturers, and
so on
r Comprehension: offering alternative descriptions and definitions, followed
by a question of “What does this mean in your own words?”
r Application: solving problems step-by-step, demonstrating necessary calculations, and solving homework problems replicating calculations
r Analysis: comparing and explaining results from different problems
r Evaluation: questioning validity of assumptions, processes, and textbook
sections on weaknesses in the model
r Synthesis: concluding with summaries and overviews
We may recognize the TL approach from our own experience or through classroom observation of peers.
To further illustrate the levels of learning, Anderson and Krathwohl’s (2001)
revision of Bloom’s taxonomy is included in the center column of Exhibit 2.1.
The third column contains an expanded list of active learning for additional
Learner-Centered Teaching
In LCT, content is used as a means to learning (Weimer 2002). Envision a learning
process in which students compute a financial problem, examine different points
of view, review and comment on an article, or postulate explanations for survey
results. The knowledge (content) is discovered and used by the students in the
learning process. Content in LCT is used as a means to learning (Weimer 2002),
not presented and covered as in the context of a TL. In effect, as the examples
will demonstrate, LCT enters Bloom’s Cognitive Learning Taxonomy through the
higher levels of application, analysis, evaluation, and synthesis.
Why LCT?
A primary explanation for education moving toward LCT is based on learning
research that supports “more active, inductive instruction” (Smart, Witt, and Scott
2012). Increased student engagement, strengthened team-based skills, personalized student guidance, focused classroom discussion, and faculty freedom are several benefits of the growing LCT pedagogical adoption (Millard 2012). In a review
of pedagogical literature with courses adopting LCT, Wright (2011, p. 96) found
college teachers believe “a more effective learning environment” was provided,
and “students tended to respond positively.” A smaller study by Wohlfarth et al.
(2008) acknowledged the need for further research and offered strong qualitative
student support of LCT’s importance in assisting learning.
There are several other reasons why LCT should be adopted. In a paper applying 29 components to benchmark the degree of LCT implementation, Blumberg
and Pontiggia (2011) note the importance of LCT in their institutions’ faculty development workshops, the implications for assessments and accreditation, and potential student admission promotional material. Yang (2010, p. 80) offers a globalization justification to adopt LCT, the need to “encourage students to actively participate in the discussion, and the need for students to fully express their views,” even
if it is counter to student cultural behavior.
Poor teaching experience with the TL is another supporting reason for LCT.
The prepared TL covering knowledge, with students attempting to retain and
simultaneously comprehend key points, may appear more as a sermon, speech,
homily, or oration. Instructors, from their own experience or through classroom
observation of peers, may relate to the “picture of somewhat lifeless students sitting passively in classrooms, with glazed eyes, some struggling to stay awake in
dimmed classrooms as an instructor shared key concepts . . . using slides” (Smart,
Witt, and Scott 2012, p. 393).
The educational goal is to engage students to become active versus passive
learners by promoting critical thinking and “emphasizing inquiry” (Bean 2011, p.
38). LCT’s flipped classrooms focus on critique, assess, hypothesize, and speculate, the
higher levels of Bloom’s Cognitive Learning Taxonomy. The base levels of knowledge and understanding may be assigned before class (Shibley and Wilson 2012).
Weimer’s Learner Centered Teaching (2002) “Five Key Changes to Practice” is a
definitive paradigm for changing pedagogy to LCT. This section describes each
of these “Five Key Changes to Practice,” which are:
1. The Balance of Power
2. The Function of Content
Implementing Enterprise Risk Management
3. The Role of the Teacher
4. The Responsibility for Learning
5. Evaluation Purpose and Process
Consideration of the five steps with each of the LCT ERM examples paradoxically resembles the TL approach. Therefore, instructors are encouraged to appraise
their current pedagogy and associate the respective LCT changes to practice with
their course. To assist your movement to LCT, Weimer’s (2002) Part Two, “Implementing the Learner-Centered Approach,” includes discussions of responding to
resistance from students and faculty, taking a developmental approach in converting students from passive to active learners, and making LCT work based on principles of successful instructional improvement. Appendixes in Weimer (2002) offer
suggestions for the syllabus and learning log (Appendix A), handouts for developing learning skills (B), and a recommended reading list (C). Blumberg (2009)
provides an extensive step-by-step guide to adopting LCT.
The Balance of Power
The LCT classroom is more democratic than the TL, where sequencing, content, and information flow are one-way: professor to student. With LCT, students actively participate in the learning process and are likely to alter its direction by connecting to prior tangential or experiential knowledge. Generally, the
teacher retains the responsibility for selecting the course content, learning goals,
and itinerary, though even these may include student input. Regardless, with LCT,
the learning path taken, the direction of course discussion, and practical examples are at the very least influenced, and more likely chosen, by the student; thus
“power is shared” (Weimer 2002).
LCT often includes case studies, small group discussions or assignments,
and/or designating a student to be a group discussion leader on a rotating basis.
Power sharing is not easy for teachers accustomed to a TL approach. But LCT
power sharing has several benefits. Students are more active, engaged, interested,
and motivated, and less passive and disconnected (Weimer 2002, p. 31). It is easier
for a student to hide in a class of 30, 50, or 100 than in a group of five students.
It should be noted that the student discussion leader is equally asked to “share
the power,” and there are potential “tough spots for running a risk management
workshop”—nonparticipation and dominators (Fraser and Simkins 2010, p. 169).
The Function of Content
With LCT, content is used in the learning process, not covered in the context of
the TL. This does not infer that the content, base knowledge, is not covered. It simply means that students do not first memorize the base knowledge for later recall.
Instead, students constructively examine, explore, review, and assess content. It is
extremely interesting to see students strongly arguing for the most important step
in an ERM process even when there may not actually be a hierarchy. Creating and
defending an argument for the most important step, what risk stands out, or what
is the most challenging step requires a cognitive reasoning process and a subtle
incorporation of base knowledge and linkage to previously learned material—the
LCT version of content coverage. With LCT, the content learning process “develops
learning skills” and “promotes self-awareness of learning,” and students “experience it firsthand” (Weimer 2002, p. 51–52).
The amount of content covered is a possible concern for those more inclined
toward a TL. However, contrary to expectations, experience suggests that more
content is covered, not less, as students explore and assess content versus
As shown in the Appendix, Example #10, Chapter 18: “Managing Financial
Risk,” is a good illustration of more coverage. The TL approach gives an example
of the trade-offs, costs, and benefits of hedging with futures contracts, often starting with a simple natural hedge. Here, the student records the respective payoffs to
long and short positions when prices change. Students memorize the transactions
and expect to replicate the steps with different numbers, and maybe even a different futures contract for a challenging TL course. With LCT, students first view
a short video about futures markets (, and then review the
listing of available futures contracts, selected quotes, and specifications. LCT scenarios in which futures contracts could be applied quite often begin with weather
futures, as students’ curiosity is awakened when they imagine rain, snow, and tornadoes, not the TL farmer and cereal producer with corn futures. With LCT, students first suggest, appraise, and associate scenarios with futures contracts, and
then calculate payoffs given the contract specifications. As noted previously, the
LCT teacher needs to be prepared to assist with any futures calculation.
A second example in the Appendix of expanded content is Example #13,
Chapter 23: “Academic Research on Enterprise Risk Management.” In a TL course,
students would memorize the articles and the findings of each, with the goal of
restating the findings on an exam. With LCT, critiquing, appraising, and theorizing
often lead to discussions of hypotheses. For example, why is there an expected relationship between ERM and “organizational slack” or “asset opacity” (Fraser and
Simkins 2010, p. 426)? This level of hypothetical discussion is considerably beyond
“Who found what?”
The Role of the Teacher
Perhaps the most difficult change in moving to LCT for a teacher accustomed to
the TL is that lectures are replaced with individual student learning, small group
discussions, or other group activities. The teacher’s role is that of a moderator, tour
guide, and/or facilitator of learning. This role is a necessary part of LCT, not an
option; the teacher “must move aside, often and regularly” (Weimer 2002, p. 74).
Serving as guide extends to after groups (or individuals) report their suggestions, hypotheses, comments, explorations, or computations. It is very tempting to return
to the TL, the “sage on the stage,” with corrections, conclusions, or examples. A
moderator or facilitator would ask: Was your group in agreement? What issues
did you differ on? What do you believe is the lesson here, the point to be learned?
Does anyone else have a different solution or computation?
Granted, the teacher’s workload may be more, not less. We often prepare,
or receive with the textbook, a series of very structured lecture slides, “talking
PowerPoints,” demonstrating what and how much we know about the topic.
Our thorough, insightful, wise lecture is interrupted only by the proverbial
Implementing Enterprise Risk Management
unanswered inquiries of: Does anyone have any questions? Is this clear? Do you
It is quite another task to be able to guide constructive explorative reasoning
and learning. It is not that LCT is without structure; it is that the LCT learning structure is flexible, fluctuating, adjustable, and often unpredictable. Weimer (2002, pp.
83–91) offers the following seven principles:
Teachers do learning tasks less.
Teachers do less telling; students do more discovering.
Teachers do more design work.
Faculty do more modeling.
Faculty do more to get students learning from and with each other.
Faculty work to create climates for learning.
Faculty do more with feedback.
The “Useful Facilitation Tips” for running a risk management workshop
(Fraser and Simkins 2010, p. 169) may serve a dual purpose as student content
and LCT advice:
r Inquire. Ask open-ended questions, such as “Why?” Ask participants to
speak not just on behalf of themselves but about what they think others
might be thinking. Ask for the contrary view: “What are some of the arguments against this?” Ask for evidence: “How do you know?”
Restate. Summarize or paraphrase what you have just heard. Summarize the
key points and then ask someone to add to them or comment on them or
contradict them.
Provoke. State extreme views that you might have heard or imagined on the
subject under discussion. Encourage healthy debate.
Use silence. After asking a question that gets no immediate response, it is
extremely tempting to fill the silence by talking more or restating the question. Don’t. Wait through the silence. If you wait long enough, someone will
Get out of the way. If a good animated discussion starts to happen that is
directly on topic and there is available time, try to “blend in with the furniture.” Walk to the side of the room or sit down. Let the students run with
it. Wait for the discussion to peter out or drift off topic before again making
your presence felt.
Don’t overexplain. The authors’ experience is that the more participation
(and less explanation or lecturing) there is in a workshop agenda, the more
engaged the participants will be. Avoid lengthy descriptions of the steps to
be taken or the underlying theory. Tell them the bare bones of what they
need to do for the next step in the process, and then let them learn by doing.
The Responsibility for Learning
Teachers remain responsible for creating a learning environment, but students
take responsibility for learning (Weimer 2002). Many of the example questions,
exercises, and activities provided in the appendix were created by students in the
ERM course. Students on a rotating basis provide discussion questions and serve
as small group moderators. Student small group moderators are encouraged to
have every student engage in the discussion process, limiting individual students
who may try to dominate, and motivating timid students. Engaged students accept
the linkage between their actions and learning. Misbehavior is better corrected by
peers who see that learning is being prevented than by teacher retribution.
Students are also responsible for contributing to course content, further engaging their interest and ownership of the responsibility for learning. For example, in
the Appendix, the tornado incident at the truck yard in LCT Example #6, Chapter
13: “Quantitative Risk Assessment in ERM,” was found by a student. The student
was delighted to share the discovered risk example, as other students accepted a
challenge to find additional videos of the incident or similar catastrophic events.
The whistle-blowing websites and information in LCT Example #12, Chapter 20:
“Legal Risk Post-SOX and the Subprime Fiasco,” were also found by students. The
content served as a basis for spirited group discussions on whistle-blowing. Consider the benefit of 30 students searching and exploring the web for current content
versus the teacher presenting a few selected sites in a TL. Avoid the classic student
statement, “That seems like a good example, but I cannot quite relate to it. It was
before I was born.”
Evaluation Purpose and Process
It reasonably follows that LCT also results in a change in evaluation procedures,
essentially orienting the evaluation process to promote learning. LCT does not
reduce the importance of evaluations and the structural value of course grades.
LCT does alter the focus of evaluations to learning, as grades do not necessarily
reflect the desired higher-level learning, especially if exams only measure recall
and rote memorization of base knowledge.
It is not a straightforward change for evaluations to emphasize learning.
Accordingly, Weimer (2002) considers the opportunities in greater detail:
r As a foundation to reduce the stakes and stress of the exam, provide review
sessions, make sure exams reflect covered content, offer multiple opportunities, or have exams taken as a group.
For papers, suggest appropriate paper topics, and clearly state academic coverage expectations.
Develop participation through both self and peer assessment.
Utilize review sessions at the end of classes and prior to exams as learning
exercises, allowing groups to summarize important content and topics that
are expected to be on the exam.
Avoid returning to the TL in the review, however tempting and accidentally
reverted to it may be.
Continue LCT into the postexam review by encouraging students to support answers they argue are correct, citing content or their reasoning process. How often, when a student states that answer C seems to be correct,
we respond with “Sorry, B is the only correct answer.” Imagine the different
response of “Why do you think C is correct?” Place the emphasis on learning,
and we may sometimes discover that answer C may also be correct.
Implementing Enterprise Risk Management
Overall, movement toward LCT may not be as large a pedagogical change as one
may be concerned about, and case study teaching is a type of LCT. The goals of the
TL generally rely on Bloom’s (1956) original taxonomy or Anderson and Krathwohl’s (2001) meta cognitive revision—striving for evaluation and synthesis. Programs to improve critical thinking and active learning through writing (Bean 2011)
also cite Bloom’s taxonomy. So the TL and LCT approaches both have the desired
educational cognitive learning theory goals of evaluation and synthesis.
Top-down instruction and hands-on methods of learning have been around
for some time, emphasizing why, what, and then how. This pedagogy has included
preparing students for learning, activating relevant knowledge, gaining students’
attention, aids to understanding, promoting meaningful processing, and directing and maintaining attention (Steinberg 1991). In essence, when evaluation and
synthesis are achieved, students know the why and the what, which leads to how.
Knowing only how, including knowledge, comprehension, and application, does
not necessarily lead to evaluation and synthesis.
If we want to increase student engagement, strengthen team skills, and use
content for learning rather than covering content for recall, LCT offers pedagogical
advantages over the TL.
We want students to examine, explore, study, associate, assess, appraise, review,
comment, speculate, theorize, postulate, offer, imagine, assume, suggest, and hypothesize.
Observing student success is extremely rewarding and encouraging, good reasons
to create a learner-centered environment versus a teacher-dominated lecture.
1. Which of Maryellen Weimer’s classic Learner Centered Teaching (2002), “Five Key Changes
to Practice” do you feel is the most important and/or challenging? Why?
(a) The Balance of Power
(b) The Function of Content
(c) The Role of the Teacher
(d) The Responsibility for Learning
(e) Evaluation Purpose and Process
2. Given the importance of globalization, how would you approach adopting LCT even if
it is counter to your student’s cultural behavior?
3. What techniques and/or guidelines do you envision to change your role as a teacher, to
“step out of the way” of learning and serve as a moderator, not a “sage on the stage” or
4. How do you plan to introduce and orient your students to LCT? Do you have specific
concerns about student response and their acceptance of responsibility for learning?
This appendix provides several LCT examples along with the related TL alternatives for an ERM course that has been conducted at Auburn University Montgomery (Alabama) since 2010. All examples and page number references apply
to Enterprise Risk Management: Today’s Leading Research and Best Practices for Tomorrow’s Executives, co-edited by John Fraser and Betty J. Simkins (2010). Learning
notes (LN) include pedagogical suggestions and course experiences. The following LCT examples are generally small group discussions, but LCT often includes
reading assignments or problems that may be done prior to the actual class meeting
(Shibley and Wilson 2012). In each example, TL begins with the traditional teacher
lecture on the topic (such as using PowerPoint slides to speak to the students and
cover the material, etc.). LCT starts with the students.
While reviewing the examples, imagine the possible implications of Weimer’s
(2002) “Five Key Changes to Practice” described in this chapter where the process
has been flipped. Most importantly, notice how content is covered but not in a traditional lecture context where the teacher presents the information. Rather, content
is used as a means of learning. Additional examples of LCT for business communication courses are contained in Smart, Witt, and Scott (2012). Wright (2011) offers
an insightful pedagogical literature review of Weimer’s “Five Key Changes to
Example #1. Chapter 2: A Brief History of Risk Management
Risk management “spans the millennia of human history” (page 19).
Cover the list of significant milestones in a series of PowerPoint slides and
explain the contribution of each to the development of ERM.
Review the List of Contributions (pages 22–27) and suggest the three most
significant milestones in the development of ERM.
Comment on why your group chose these milestones.
Was the group generally in agreement? If not, what were the other selected
Groups generally differ on the top three milestones, usually based on different themes: economic events, creation of professional organizations,
contributions and development of risk management theory, or possibly
legislative actions.
The list of significant milestones small group exercise provides an early
and substantial insight into LCT. Rather than memorize, recall, and explain,
the students are asked to review, suggest, and comment—all higher levels
of Bloom’s Cognitive Learning Taxonomy. It is most rewarding to see students argue about the top three, supporting their choices by associating
or assessing the impact of milestones on the development of risk management. There may not even be a top three, and even if there is, the teacher
has a postgroup selection opportunity to guide the discussion or note the
differences in theme the groups selected.
Example #2. Chapter 3: ERM and Its Role in Strategic Planning
and Strategy Execution
Cover the List of 11 Tenets of the Return-Driven Framework (pages 37–38).
Appraise the list of risk categories for the greatest risk (pages 41–42).
r Shareholder value risk
r Financial reporting risk
r Governance risk
Implementing Enterprise Risk Management
Customer and market risk
Operations risk
Innovation risk
Brand risk
Partnering risk
Supply chain risk
Employee engagement risk
Research and development (R&D) risk
Communication risk
The textbook presentation states that “the framework encourages thinking about these risk categories” (page 41). With LCT, students should be
encouraged to do so, and in the learning process incorporate the 11 tenets.
A “genuine asset” is . . . (page 38).
Create a list of “genuine assets” for a company of your choice.
A simple create exercise includes recognize, apprehend, and determine. The
teacher may facilitate clarifications and corrections by guiding subsequent
classroom discussion in examining, critiquing, and exploring the different
lists of “genuine assets.”
Example #3. Chapter 5: Becoming the Lamp Bearer—The
Emerging Roles of the Chief Risk Officer
The chief risk officer has four major roles: (1) compliance champion, (2)
modeling expert, (3) strategic controller, and (4) strategic adviser. In the
first role . . . (pages 75–81).
Reviewing Exhibit 5.1 (page 80), distinguish the roles of strategic controller
and adviser.
Postulate which role of the chief risk officer is the most important.
Postulating requires memorization, comprehension, distinguishing, and
Example #4. Chapter 8: Identifying and Communicating Key
Risk Indicators
Key risk indicators are an ERM tool that . . . (page 129).
Distinguish key risk indicators from key performance indicators.
Suggest the key risk indicator practical applications that are most important to achieve the organizational strategy of the company you work for, a
company chosen by your group, or the university.
The facilitator role is often needed on this topic, as key risk indicators may
be confused with or closely aligned with key performance indicators.
Example #5. Chapter 11: How to Prepare a Risk Profile
The Risk Map is a graphic representation of a Risk Profile and in this case
contains eight risks (page 173). The first risk is . . .
There are eight steps to create a Risk Profile (pages 177–186).
Step 1: Schedule interviews and gather background information.
Step 2: Prepare the interview tools.
Step 3: Summarize the interview findings.
Step 4: Summarize the risk ratings and trends.
Step 5: Draft the Top 10 Risk Profile.
Step 6: Review the Draft Risk Profile.
Step 7: Communicate the Risk Profile with the board or a board
Step 8: Track the results.
Appraise the benefit of a Risk Profile and Risk Map.
Suggest which step is the most challenging in preparing a Risk Profile.
Comment on why your group selected this step.
Create a Top 10 Risk Profile for the company you work for, your university,
or your school.
Example #6. Chapter 13: Quantitative Risk Assessment in ERM
This chapter discusses risk assessment and risk quantification . . . (page
Explore information related to the Schneider Truck Yard Tornado Damage
in Dallas, Texas, on April 3, 2012. This results in a large number of videos
and news stories.
Assess where this event would be placed in a Risk Map. Comment on how
the event may be viewed in a statistical analysis. Now speculate on your
reaction if you have just received a phone call stating, “All of the trailers
and tractors in your Dallas Hub have been destroyed.”
See Exhibit 13.3 of Fraser and Simkins (2010, p. 224).
The video of tractor trailers flying through the air is striking. This is a
learning opportunity to consider the ERM of “tail events” and “known
Example #7. Chapter 14: Market Risk Management/Credit
Risk Management
Looking at the Taxonomy of Market Risk and Credit Risk (page 240):
The first market risk is . . . . The next one is . . . . The third one is . . . .
The first credit risk is . . . . The next one is . . . . The third one is . . . .
Distinguish between market risk and credit risk.
Reviewing the different types of risk, assess which risk is most striking and
noteworthy. Comment on why your group chose this risk.
Example #8. Chapter 16: Operational Risk Management
This chapter illustrates the answers to fundamental questions, including
(page 280):
r What is operational risk? Why should you care about it?
r Is risk all bad?
Implementing Enterprise Risk Management
r How do you assess operational risks, particularly in a dynamic business
r Why do you need to define risk tolerance for aligned decision making?
r What can you do to manage operational risk?
r How do you encourage a culture of risk management at the operational
r How do you align operational risk management with enterprise risk
First, let’s answer the question of “What is operational risk?”
Using Exhibit 16.2, The Bow Tie Model (page 291), provide an analysis of a
current news event. This is reprinted as Exhibit 2.2 in this chapter.
The current news event may be any risk event, from explosions to traffic
wrecks, bankruptcies to product recalls, flood damage to tornado damage,
information leaks to software failures. The analysis answers the questions,
and the content is used as a means to learning.
“The 5 Whys is a question-asking method that can be used to explore the
cause-and-effect relationships underlying a particular risk event or problem” (page 294).
Continue your current news event analysis by exploring with at least five
There are always current risk events in the news, most of which can be
searched for, often including videos. As an example, a recent class chose
a wreck between a church bus and a truck on an expressway. At first, it
appeared that the group’s risk event selection was a direct adoption of the
textbook example—a fatal accident (page 294).
However, the student-engaged whys expanded quickly, as follows:
Why did the wreck occur? Bus crossed median of expressway after tire
blew out.
Why did the tire blow out? Poor bus maintenance, bad tire, debris on
Why was there poor bus maintenance? Expenses limited by budget.
Why was the driver not able to control the bus? Young, inexperienced
Why was the driver an inexperienced volunteer? Previous older, experienced driver quit driving given his age. Newer driver only needs to pass
commercial driver’s license (CDL) exam and drives no more than twice per
week, rarely on the expressway.
Why did the bus cross the median? No safety barrier in place.
Why was there no safety barrier in place? State had added several
hundred mil…
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