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  • 1. Developing a Risk Intelligent OrganizationWWW.ALEXANDERHAMILTONAWARDS.COM Presented by:
  • 2. 2011 Revenue: $4.5 Billion Global Presence: Offices In 46 Countries 9400 Employees #2 In Core#3 In Edge Routing, Routing, SP Routing, #1 In High-end FirewallEthernet Switching Network Security Doing Business With 100% Of Fortune 100 Powering 6 Of The World’s 7 Largest Stock Exchanges Mission: Connect Everything. Empower Everyone Presented by:
  • 3. Issue: Enhancing Oversight for Risk Issue Objectives Key Questions • Who manages risk? • Fulfill BOD, Legal and • How do we define risk? Provide greater risk Regulatory • What oversight for riskoversight to protect and Requirements (NYSE, exists at the BOD level? enhance shareholder S&P, etc…) • How do we assess risk? value while making the • Be pragmatic • Is there a best practice?right trade-offs between • Leverage best practices • What are other public risk and reward • Build a more risk companies doing? intelligent culture • Can we leverage work? Presented by:
  • 4. Problem: No One Best Approach to ERM COSO Basel IIAustralian and ERM ISO 31000 New ZealandStandard 4360 GRC Consultants … Juniper Networks evaluated common elements and adapted a model to fit our unique culture… Presented by:
  • 5. Solution: Building a Sustainable Risk Management Framework Develop risk governance model Develop risk universe Risk Identify Risks from defined risk register Define risk prioritization criteria Governance Integrated Risk Assess and prioritize risks Management Approach Identify risk owners Risk Infrastructure Identify drivers & mitigation Integrate with corporate processes Risk Ownership Develop risk monitoring/reportingSource: Juniper Networks adapted a model with Deloitte Consultingwhich focuses on governance and enhancing risk intelligence. Thismodel captures many of the common elements of other publishedERM and governance models. Presented by:
  • 6. Solution: Develop Clear Roles & Accountability Juniper’sIntegrated Risk Management Approach Risk governance includes risk oversight and strategic decision-making. It defines the parameters of acceptable risk, monitors strategic alignment, and sets overall risk management expectations. Juniper established Risk Management Committee and Risk Working Team consisting of leadership across the company to drive the program. Governance Risk infrastructure includes designing, implementing, and maintaining an effective risk management program and is composed of the three “pillars of people, process and Risk Infrastructure technology” and is the essential link between risk governance & risk ownership. Risk ownership is what risk governance relies on to execute Risk Intelligence. It includes all of the functions’ and business units’ responsibilities with regard to Risk Ownership identifying, evaluating, mitigating, and responding to risks in accordance with risk governance mandates. Risks are owned by individuals and interdependencies identified. If appropriate, risks are aligned to corporate scorecards and objectives. Presented by:
  • 7. Integrated Risk Management Governance, Risk Management & Compliance of Juniper’s Risks Risk Management Committee Compliance & SOX Committee OPERATIONAL/ STRATEGIC FINANCIAL COMPLIANCE INFRASTRUCTURE• Risks arising from the • Risks arising from the • Risks arising from our • Risks arising from our Company’s inability to Company’s inability to inability to effectively inability to comply with formulate a successful effectively manage forecast, manage and laws, regulations, key business strategy and business assets – report financial Company policies and achieve its long-term people, processes and components – to contractual obligations. objectives. systems – and products achieve successful and customers – to execution of the achieve successful Company’s strategies. execution of the Company’s strategies. Internal Audit Risk is the potential for loss or the sub- optimization of gain… Presented by:
  • 8. Risk assessment and prioritization… Risk PrioritizationDisclosed Risks10K/10Q Analysis Juniper Networks Input from key executives Strategic & Operational RisksSector Reports Working Team’s Knowledge of Risk Presented by:
  • 9. Continuous measurement Strategic/Risk Stakeholder Optimization Risk value Integrated Initial Awareness/ Silos Specialist Silo Future State … Juniper Networks evaluated our program’s maturity level using a simple 9-point diagnostic. Presented by:
  • 10. Benefits to Juniper Networks Direct Indirect Enhanced oversight and transparency for risk  Negotiating better risk management at the Board and Executive Management level programs for operational risks Framework to discuss risk across the company  Focus limited resources (i.e., people Prioritized resources on top risks and finances) on critical priorities Aligned corporate strategy to top risks  Promote Treasury’s role on Balance Accountability for mitigation with one risk Sheet Protection & Risk Optimization owner  Leverage and utilize the work on ERM to external companies including insurance companies, rating agencies, and other financial institutions Presented by:
  • 11. Thank you… Q&AWWW.ALEXANDERHAMILTONAWARDS.COM Presented by: