An Application Of Enterprise Risk Management
In The Marine Transportation Industry
Author(s)
M. D. Abkowitz & J. S. Camp
Abstract
Establishing the current status and future direction of an organization’s
enterprise risk management (ERM) practice demands an ability to benchmark the
existing level of performance and prioritize where risk mitigation actions are
warranted. This requires a systematic and holistic approach that can identify and
assess every \“reasonably foreseeable risk”, compare risks on a common basis for
prioritization of \“hot spots”, and evaluate the effectiveness of candidate risk
mitigation strategies. Designing and implementing a management tool that
organizations can utilize for this purpose is challenging, given that it must be
comprehensive in nature, yet easy to apply.
This paper describes the development of such a tool and its subsequent
application to a large marine transportation carrier. In this application, two
separate ERM activities were undertaken; one focusing on a functional line of
operations throughout the entire organization (information technology and cyber
security), and the other involving all activities associated with a specific
geographical region that serves as an operations hub. The resulting risk
scenarios, assessments and candidate mitigation strategy evaluations are
described and discussed.
The paper also shares several lessons learned that are important for
organizations interested in developing and applying ERM tools. These include
how to overcome the challenges of: (1) structuring a framework for identifying
enterprise risks and creating corresponding scenarios that are all inclusive,
(2) creating an appropriate system for associating the likelihoods and
consequences with various risk scenarios, and (3) developing a protocol to
enable evaluation of the benefits and costs of potential risk mitigation strategies
that are developed in response to those risks that have been deemed to warrant
Keywords
enterprise risk management, marine transport, cyber information security, risk identification, scenario analysis, risk mitigation, risk assessment, hazard analysis, disaster management
Related Book
Other papers in this volume
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