Chapter 18 presented special risk management issues with Blue Wood Chocolates, and chapter 19 presented various financial risks at Kilgore Custom Milling. If Blue Wood Chocolate and Kilgore Custom Mil
2 Substantive reply posts needed:
Post 1:
Hi all,
In Blue Wood Chocolate Company, the development of risk management framework is responsible for chief financial officer. In Kilgore Custom Milling Company need to hire the chief risk officer for handling of risks in organization. The chief risk officer should able to answer the two companies’ CEO’s and the both companies hazards issues addressed by chief risk officer. In Blue Wood Chocolates company for identification of risks need to develop the enterprise risk management framework. In Blue Wood Chocolates company, the major risks are financial money related conflicts and risks from last year. For identification and resolve of Blue Wood Chocolates risks and obligations required to develop the effective ERM framework. The structure of ERM framework is efficient for resolve of Blue Wood Chocolates business risks. So, the Blue Wood Chocolates director and individuals of board are involved in development and execution of ERM framework (Aguirre, Mercedes & Vadiveloo, Jay, 2013).
In Kilgore Custom Milling Company, the CFO officer is Cathy. This company also have some of the money related problems and risks. This company have many income related board problems and it the CFO officer have lost the initiative responsibility. For resolve of income issues need to check the records of clients, inventories upgrading and try to utilize the leases rather than purchases. So the Cathy need to perform well administration in resolve of money related hazards in Kilgore Custom Milling Company. For chief risk officer the smaller companies does not have any resources the company CEO and CFO officers are handling the processes and handling the risks (Aguirre, Mercedes & Vadiveloo, Jay, 2013).
References
Aguirre, Mercedes & Vadiveloo, Jay. (2013). Enterprise Risk Management – Small & Medium Sized Enterprises. .
Post 2:
Concerning Blue Wood Chocolates, any new project or process implementation should have executive support or it will not succeed, that is if it even gets started. As stated in the conclusion, in order to properly implement their ERM initiative they “would need buy-in from the top, specifically the CEO, chairman, and the board” (Kolb, 2015, p. 348). In this case, I would say that a CRO should be appointed. I believe it sounds as if Sally is the most likely candidate for this position and she should report to the board. As well, a team should be assembled from the various key constituencies within the business in order to get a full perspective of the areas of risk that exist.
In the case of Kilgore Custom Milling, I think Rory Sullivan would be the best candidate for the CRO position as he understands “all manufacturing and plant operations” (Kolb, 2015, p. 368). He would report to the CEO Steve MacLinden. It would be beneficial for the other members of the management team to be part of the ERM team in order to get a well-rounded view of the potential risks that the company is facing in order to do a proper assessment.
In the case of smaller companies, I think forming a risk management team is the best idea. It would still need executive buy-in, but the initiative could be distributed among the team members. That way no one person has to drive the process. However, even in this scenario there would need to be an obvious leader that keeps the process on target and progressing.
References:
Kolb, R. W. (2015). Implementing Enterprise Risk Management: Case Studies and Best Practices. Hoboken: Wiley.
