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    ERM Presentation

    Uploaded by

    Samhitha Kandlakunta
    1. Johnson & Johnson has implemented an enterprise-wide risk management program to address various risks across its subsidiaries and operations. 2. Key risks include compliance, reputation, market, credit, legal, operational, regulatory, and catastrophic risks. 3. Johnson & Johnson's ERM framework involves the Board, an Audit Committee, a Group Risk Management Committee, and business units working together through a top-down and bottom-up approach to risk identification, assessment, and mitigation.

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    ERM Presentation

    Uploaded by

    Samhitha Kandlakunta
    329 views12 pages
    1. Johnson & Johnson has implemented an enterprise-wide risk management program to address various risks across its subsidiaries and operations. 2. Key risks include compliance, reputation, market, credit, legal, operational, regulatory, and catastrophic risks. 3. Johnson & Johnson's ERM framework involves the Board, an Audit Committee, a Group Risk Management Committee, and business units working together through a top-down and bottom-up approach to risk identification, assessment, and mitigation.

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    Enterprise Risk Management in Pharmaceutical industry.

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    1. Johnson & Johnson has implemented an enterprise-wide risk management program to address various risks across its subsidiaries and operations. 2. Key risks include compliance, reputation, market, credit, legal, operational, regulatory, and catastrophic risks. 3. Johnson & Johnson's ERM framework involves the Board, an Audit Committee, a Group Risk Management Committee, and business units working together through a top-down and bottom-up approach to risk identification, assessment, and mitigation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    329 views12 pages

    ERM Presentation

    Uploaded by

    Samhitha Kandlakunta
    1. Johnson & Johnson has implemented an enterprise-wide risk management program to address various risks across its subsidiaries and operations. 2. Key risks include compliance, reputation, market, credit, legal, operational, regulatory, and catastrophic risks. 3. Johnson & Johnson's ERM framework involves the Board, an Audit Committee, a Group Risk Management Committee, and business units working together through a top-down and bottom-up approach to risk identification, assessment, and mitigation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    ERM in Pharmaceutical Industry

    Case Study: Johnson & Johnson


    Under the guidance of: Mr. Venugopal
    By: K. Samhitha FS10-017

    Introduction
    ERM Need for ERM in pharmaceutical industry

    Johnson & Johnson


    A multinational founded in 1886 Fortune 500 company Subsidiaries , outreach & employees Awards & Rankings Products Financial details Mission & Credo

    Risk exposures & Mitigation


    Compliance related-Chief compliance committee &audits Reputation risk quality control & insurance Market risk- financial instruments Credit risk-credit policy & limits, credit derivatives Legal risk- recording accruals Operational risk- CAPA tool Weather related-BCP Regulatory risk-making provisions Catastrophic risks- BCP Potential chemical & physical hazards-toxicology team & industrial
    hygiene program

    ERM at J & J
    Essence of ERM: 1. ERM provides a framework for discipline 2. ERM is much more than mere compliance to SOX Act. 3. ERM drives value through knowledge

    ERM Structure & Responsibilities


    The Board: _ Overall responsibility for risk management _ Ensure risk management is embedded into all processes and activities _ Review group risk profile Audit Committee: _ Receive routine reports from GRMC _ Set annual audit program and priorities _ Monitor progress with audit recommendations _ Provide risk assurance to the Board _ Oversee RM structures and processes Group Risk Management Committee (GRMC): _ Formulate strategy and policy based on risk appetite, risk attitudes and risk exposures _ Receive reports from business units, review risk management activities and compile the group risk register _ Receive reports from business units and make reports and recommendations to the Board _ Track RM activity in the business units and keep the risk management context under review

    Cont.
    Disclosures Committee: _ Review and evaluate disclosure controls and procedures _ Consider materiality of information disclosed to external parties Compliance committee: _Ensure Compliance with laws & regulations: -Antitrust and Competition Laws -Environmental Laws and Regulations -Healthcare Compliance; Approval, Manufacture, Sales and Marketing of Drug, Medical Device, Diagnostics, and Consumer Products -Employment and Labor Laws and Policies -Securities Laws -Respect for Trade Secrets and Confidential Information

    Cont.
    Business units: _ Produce specific policy statements, as necessary _ Prepare and update the business unit risk register _ Set risk priorities for business unit _ Monitor projects and risk improvements _ Prepare reports for GRMC _ Manage control risk self-certification activities Top down & Bottom-up Approach of Reporting & Communication

    Implementation of ERM
    BRM within businesses & operationsfoundation 3 Phase Implementation: -1st:Building a foundation for BRM -2nd:Segment-level BRM -3rd:Enterprise level BRM (ERM)

    Results
    Creation of risk universe- aggregation of risk themes. Nine-Box Rating Map-for mapping & categorizing risks into: -Low -Moderate -High

    Lessons Learnt
    Be facilitative, consultative, and help your stakeholders address their current needs to create quick wins and build a foundation of trust. Dont boil the ocean. Do you want comprehensive coverage? Absolutely. Do you want to look at all large risks? You bet. But do it in a smart fashion. Dont name 100 potential risks and ask the business to assess everything under the sun. Get the right level of sponsorship and executive engagement.

    Create standardization where possible to gain efficiencies, and set minimum thresholds of execution while being as flexible as possible
    Include people with diverse backgrounds from different industries and functions as each has a different way of looking at risks. Understand the concepts of risk management, and learn from what others have done, but dont forget to customize approach, tools, and processes to what will work in your culture. Relentless persistence for improvement

    Conclusion
    ERM is perceived as a tool to mitigate down-side exposures. But emphasis is not made on how to capitalize on upside opportunities. Hence, a change of perception would go a long way in making ERM in pharmaceutical industry more effective.

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