文档介绍：WHITEPAPER
Clarity. Confidence. Control.
Operational Risk
Management — Beyond
Compliance to
Value Creation
By James Lam, President,
James Lam & Associates, Inc.
June 2007
WHITEPAPER
panies Operational Risk Management —
have always needed pliance to Value Creation
to manage operational
risks, the practice of Introduction
ORM as a separate In the early 1990’s, operational risk management (ORM) initial-
discipline is still evolving. ly entered the lexicon of risk professionals when corporate dis-
asters — Barings, Kidder, Daiwa — were caused by factors that
fell outside of the purview of traditional risk management
functions (credit/market risk management). Fast forward to
recent years, the rogue trader has been replaced by the rogue
Table of Contents CEO, CFO, and others entrusted with shareholder money.
Introduction 1 While the titles have changed, the underlying issues —
Research Methodology 2 accounting fraud at Enron and ; market timing and
Value Proposition for ORM 2 late trading in mutual funds; kickbacks in insurance brokerage;
ORM – Downside Risk 3
and options back-dating — have continued to highlight the
ORM – Upside Risk 3
importance of ORM. Moreover, the consequences for the mis-
The ORM Maturity Model 4
management of operational risk have e much more
Stage I: Foundation Setting 5
Stage II: Regulatory and 5 severe in terms of CEO/CFO firings, regulatory fines, and crimi-
pliance
nal investigations and jail sentences.
Stage III: Integration 5
and Rationalization
Stage IV: Business Value 6 panies have always needed to manage operational
Creation
risks, the practice of ORM as a separate discipline is still evolving.
Bank Analogs to the 7
ORM Maturity Model In recent years, most risk professionals have considered ORM the
Roadmap to an Effective 8 “next frontier” in risk management. Relative to credit risk and
ORM Model
Stage I: Foundation Setting 8 market risk, operational risk i