【正文】 HKK 1/30/2023 3 Nokia Mikko Routti It is one thing to set up a mathematical model that appears to explain everything. But when we face the struggle of daily life, of constant trial and error, the abiguity of the facts as well as the power of the human heartbeat can obliterate the model in short order. Peter L. Bernstein: Against the Gods The Remarkable story of Risk HKK 1/30/2023 4 Nokia Mikko Routti “We are not just adding all of these risks together. We are creating a probabilistic view of how much capital is actually necessary.” Rick Buy, Chief Risk Officer, Enron “We review how good it can get, we review how bad it can get, and every place in between.” Rick Causey, EVP and Chief Accounting Officer, Enron HKK 1/30/2023 5 Nokia Mikko Routti What does risk appetite mean in practice? ? Are we focusing on opportunity? ? Is there a clear view of the appetite for risk? ? Is there balance in risks and rewards? (. high risks vs low rewards) ? Where should most of management’s effort be directed? A Generic Business Risk Continuum Opportunity Uncertainty Hazard Compliance And Prevention Operating Performance Strategic Initiatives Key Questions to Consider... Environment Health safety Supply chain Software Product creation HKK 1/30/2023 6 Nokia Mikko Routti E x t e r n a l l y d r i v e nF i n a n c i a l R i s k S o u r c e sH a z a r d R i s k S o u r c e sS t r a t e g i c R i s k S o u r c e sO p e r a t i o n a l R i s k S o u r c e sC u r r e n c y / f o r e i g ne x c h a n g eI n t e r e s t r a t e sC r e d i tC o m m o d i t y p r i c e sC o u n t e r p a r t i e sL i q u i d i t y a n d c a s h f l o wI n t e r n a l l y d r i v e nC u s t o m e r d e m a n dC u s t o m e r /i n d u s t r yc h a n g e sC o m p e t i t i v eP r e s s u r eI n t e l l e c t u a l c a p i t a lR e s e a r c h d e v e l o p m e n t M e r g e r s A c q u i s i t i o n sC o n t r a c t sG e n e r a l P u b l i cE m p l o y e e sC o n s u m e r sP r o p e r t i e sP r o d u c t s a n dS e r v i c e sN a t u r a l e v e n t sV e n d o r s a n dS u p p l i e r sP r o c e s s C o n t r o l sI n f o r m a t i o n s y s t e m sR e g u l a t i o n sA c c o u n t i n g / c o n t r o l sS u p p l y c h a i nT a l e n t A c q u i s i t i o nT a l e n t M a n g e m e n tB o a r dC o m p o s i t i o nRISK UNIVERSE HKK 1/30/2023 7 Nokia Mikko Routti 15 169。 N O K I A F I L E N A M s . P P T / D A T E / N N2 0 0 1 1 9 9 9 1 9 9 7 1 9 9 51 L o s s o f R e p u t a t i o n B u s i n e s s I n t e r r u p t i o n F i r e F i r e2 F a i l u r e t o C h a n g e P h y s i c a l B u s i n e s s I n t e r r u p t i o n E m p l o y e r s 碙 i a b i l i t y3 B u s i n e s s I n t e r r u p t i o n P r o d u c t L i a b i l i t y E m p o l y e e R i s k s H e a l t h S a f e t y4 P r o d u c t L i a b i l i t y R e p u t a t i o n E n v i r o n m e n t a l B u s i n e s s I n t e r r u p t i o n5 C o m p u t e r C r i m e G e n e r a l L i a b i l i t i e s C o m p u t e r C r i m e P r o d u c t L i a b i l i t y6 G e n e r a l L i a b i l i t y E m p l o y e e R i s k sP r o d u c t L i a b i l i t y , T a m p e r , B r a n d P r o t e c t i o n E n v i r o n m e n t a l7 P h y s i c a l D a m a g e P r o f e s s i o n a l I n d e m n i t y O t h e r C r i m e , F r a u d , T h e f t F l o o d8E m p l o y e e R e c r u i t m e n t / R e t e n t i o n C o m p u t e r C r i m e T e r r o r i s m T e r r o r i s m9 D O L i a b i l i t i e s P o l i t i c a l R i s k D O L i a b i l i t i e sP r o f e s s i o n a l I n d e m n i t y10 E m p l o y e e A c c i d e n t s O t h e r C r i m e P r o f e s s i o n a l I n d e m n i t yO t h e r C r i m e , F r a u d , T h e f tW h a t a r e t h e ‘T o p 1 0 ’ g r e a t e s t r i s k s f a c i n g y o u r o r g a n i s a t i o n ?W h a t a r e t h e ‘T o p 1 0 ’ g r e a t e s t r i s k s f a c i n g y o u r o r g a n i s a t i o n ?A O N Bien n ial Ris k M a n ag e m en t an d Risk F i n an cin g Sur v e yHKK 1/30/2023 8 Nokia Mikko Routti How does risk manifest itself? – Fortune 1000 Group Analysis One hundred (10%) of the Fortune 1000 panies suffered a loss of over 25% of shareholder value within one month 241276421 1 1117 763210 00510152025Cost Overruns Accounting irregularities Management ineffective ness Supply Chain Issues Competitive Pressure MA Integration Problems Mis aligned Products Customer Pricing Pressure Loss of Key Customer Supplier Problems RD Delays Customer Demand Shortfall % of top 100 Regulatory Problems Strategic Operational Financial Hazard Foreign Macro Economic Issues Interest Rate Fluct uation High Input Comm odity Price Law suits Natural Disasters 58% 31% 6% 0% Primary Cause of Stock Drop ( of Companies) Source: Compustat, Mercer Management Consulting analysis Note: There were also 5 stock drops for which the primary cause could not reliably be determined. These 5 stock drops are not depicted. 169。 association