1. Institute of Risk Management & Chartered Accountants Ireland Creating Value 11 th Feb 2016 ‘’Doing Risk Management Vs The Quality of Decision Making’’ Risk Management International RMI Board Risks 1

2. Topics: Where has Risk Thinking Come From? Where is Risk today? Where is Risk going tomorrow? Lessons learned from the Global Financial Crisis, The Relationship Between Risk and Strategy, Moments of Truth: Tell Me? Show Me? Prove it to Me? Operationalizing the links between Risk and Strategy, Conclusions, Risk Management International RMI Board Risks 2

3. Where has Risk Thinking Come From? Evolution of Risk Management: Source Institute of Management Accountants Risk Management International RMI Board Risks 3

4. Where is Risk Thinking Today? Next Evolution in Risk Management: Resilience: Focus on Un-measurable Uncertainties Risk Management International RMI Board Risks 4

5. Where is Risk Going Tomorrow? R.I.S.K.: Risk Intelligent Systems Knowledgeware within the Industrial Internet of Things (Reference: James Bone etc.) Note: Key Driver … Industrial Internet of Things Risk Management International RMI Board Risks 5

6. Lessons Learned: Global Financial Crisis Directors Responsibilities: FRC: Sep ‘14 Guidance on Risk Management, Internal Control and Related Financial and Business Reporting FRC: June ‘14 Guidance on the Strategic Report PRA: July ‘15 Supervisory Statement: Strengthening individual accountability in banking Risk Appetite & Culture: FSB: Nov ‘13 Principles for an Effective Risk Appetite Framework FSB: Apr ‘14: Guidance on Supervisory Interaction with Financial Institutions on Risk Culture Integrated Thinking, Reporting & Decision Making, International Reporting Council Framework ˂ IR ˃ : Dec ‘13 IFAC: May ‘15 From Bolt-on to Built-in…Decision Making…tearing down the Risk Management Silos IFAC Nov ‘15: Creating Value with Integrated Thinking Risk Management International RMI Board Risks 6

7. Lessons Learned: Global Financial Crisis The Role of the Board: UK Corporate Governance Code Source (Content): UK Corporate Governance Code Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting (Sep 2014) NOTE: TRUNCATED Risk Management International RMI Board Risks 7

8. Lessons Learned: Global Financial Crisis Integrated Thinking & Reporting NB: The Value Creation Process: Source: International Integrated Reporting Framework ˂ IR ˃ Risk Management International RMI Board Risks 8

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10. The Relationship between Risk and Strategy Risk Management International RMI Board Risks 10

11. Moments of Truth: Tell Me? Show Me? Prove it to Me? Linking Risk, Strategy and Decision Making Processes at a Level of Calculation Ability to Demonstrate 1. Bronze: Unable to demonstrate Structured informality, but unmeasured 2. Silver: Limited ability to demonstrate Board awareness, existence of formal processes, measurement has commenced, 3. Gold: Ability to demonstrate Systems are consistent and measurement is becoming more reliable 4. Platinum: Fully able to demonstrate Demonstrably credible alignment of leadership, strategy, people, partnerships & resources and process/product /services L 5. Prove & Test Independent Assessments, User Percentile of Total Process Owner Population Recognised as Global role model Organisational systems optimised and positively influencing performance and access to & cost of capital, Increasing Agility, Robustness & Long Term Sustainability Commercial in Confidence: Copyright RMI Board Risks

12. Operationalising the Link between Risk and Strategy: Moments of Truth: RMI Tell Me? Show Me? Prove it to Me? Risk Management International RMI Board Risks 12

13. Conclusion: Be Aware of, and Understand, World Class Practices, ‘Measure’ your alignment, Accentuate your Strengths and Address your Areas for Improvement ‘’It ain’t what you don’t know that gets you into trouble; it’s what you know for sure that just ain’t so!” Mark Twain ‘’Risk comes from not knowing what you are doing’’ Warren Buffet ‘’If you can't describe what you are doing as a process, you don't know what you're doing’’ W.Edwards Deming ‘’In the absence of certainty, the only way to maintain potentiality is to focus on excellent execution and demonstrable resilience at the same time whilst taking as much acceptable risk as is reasonably possible’’ (Peter Bernstein, Against the Gods: The Remarkable Story of Risk) Risk Management International RMI Board Risks 13

14. Thank you! Peadar Duffy Founder & Chairman Risk Management International peadar.duffy@rmi.ie www.rmi.ie Risk Management International RMI Board Risks 14