Implementing Enterprise Risk Management: Case Studies and Best Practices

CHAPTER 19 Kilgore Custom Milling

RICK NASON, PHD, CFA

Partner, RSD Solutions Inc., and Associate Professor of Finance, Dalhousie University

STEPHEN MCPHIE, CA

Partner, RSD Solutions Inc.

This case study provides a broad spectrum of issues—both opportunities and potential threats—that arise from creating growth opportunities. Many risks can be explored and debated as part of various approaches to enterprise risk management (ERM), including using strengths, weaknesses, opportunities, and threats (SWOT) analysis and risk profiles. In particular, this case focuses on financial risk management as taught in Chapter 14, “Market Risk Management and Common Elements with Credit Risk Management,” in Enterprise Risk Management: Today's Leading Research and Best Practices for Tomorrow's Executives, edited by John Fraser and Betty J. Simkins (John Wiley & Sons, 2010). Thus, teachers of ERM can focus at the corporate level and include all risks, or delve more specifically into financial risks, or go even more specifically into liquidity or foreign exchange risks.

BACKGROUND

“Hope is not a risk strategy! Wishful thinking is not the best we can do, and furthermore we can't repeat the mistakes of the past if we want to move to the next level. We need to think this through more carefully!” Cathy Williams was growing ever more tired and frustrated. She and her four-person treasury team had been struggling with various aspects of the new supply contract for weeks, and all that remained was how ...