Risk From the CEO and Board Perspective: What All Managers Need to Know About Growth in a Turbulent World

322 Pages·2003·0.94 MB·English

by  Mary Pat McCarthy

RISK FROM THE CEO
AND BOARD
PERSPECTIVE
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RISK FROM THE CEO
AND BOARD
PERSPECTIVE
Mary Pat McCarthy
and
Timothy P. Flynn
Contributing author:
Rob Brownstein
McGraw-Hill
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DOI: 10.1036/0071457186
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Contents
Acknowledgments vii
Introduction ix
Section I: Companies at Risk 1
Chapter 1: Executive Agenda 3
Chapter 2: The Salt Lake Olympics and Risk’s
Shifting Sands 31
Chapter 3: Risk in a Modern Global Business Context 57
Section II: Mitigating Pervasive Risk 83
Chapter 4: Treatment Options 85
Chapter 5: The Numbers Game—Responding to
Financial Risk 107
Chapter 6: The Enemy Within—Responding to
Operational Risk 131
Section III: Governing Principles 149
Chapter 7: We the People of the Board 151
Chapter 8: The Audit Committee, Risk and Regulation 177
v
Contents
Chapter 9: Inside Section 404 205
Chapter 10: Internal Control—Insights from the Field 227
Chapter 11: Holistic, Integrated Approaches to
Risk Management 247
Chapter 12: The End of the Beginning 267
Recognition 277
Bibliography 279
Endnotes 287
Index 293
vi
Acknowledgments
Sitting down to write a book is a proposition filled with
risk, but we were rewarded beyond our due by the
gracious consideration and support that so many people gave
to this project. We are indebted to each of these individuals
and know with certainty this book is better for their help.
To General Barry McCaffrey, for his insights on the
greatest risks of all, those played out in the field of battle.
To the 15 executives and board members who graciously
shared their time and experiences with us: Richard Bressler,
Senior Executive Vice President and CFO of Viacom; Brent
Callinicos, Corporate Vice President and Treasurer of
Microsoft; Doh-Seok Choi, President and CFO of Samsung;
Jeff Clarke, Executive Vice President of Global Operations of
Hewlett-Packard; Robert Dellinger, Executive Vice President
and CFO of Sprint; Scott Di Valerio, Corporate Vice
President and Corporate Controller of Microsoft; Pattie
Dunn, Vice Chairman of Barclays Global Investors and a
member of Hewlett-Packard’s Board of Directors; Rod
Eddington, CEO of British Airways; Jeff Henley, Executive
Vice President and CFO of Oracle; Mark Hurd, CEO of NCR;
Jay Keyworth, Chairman of the Progress & Freedom
Foundation and a member of Hewlett-Packard’s Board of
vii
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nonoperating Swiss association. Click here for terms of use.
Acknowledgments
Directors; Peter Oppenheimer, Senior Vice President of
Finance and Corporate Controller of Apple Computer; Ken
West, Chairman of the Board of the National Association of
Corporate Directors, former CEO of Harris Bankcorp,
member of the Board of Directors of Motorola and The
Pepper Companies, and the Senior Consultant for Corporate
Governance at TIAA/CREF; Robert Woods, CBE, CEO of
P&O Group; and John Wren, CEO of Omnicom Group.
To our partners and colleagues, for the wisdom and assis-
tance they so generously gave: Stephen Allis, Amy Beard, Tim
Bell, Donna Bonavita, Alun Bowen, Darryl Briley, Stuart
Campbell, Mark Carleton, Michael Conover, Frederic
Cooper, Malcolm Dahn, Patricia Derry, Jonathan Eesley,
Patty Eisenbarth, Bob Elliott, Carl Geppert, Terrence Henzey,
Ted Horne, Diane Kiffin-Nardin, Peter Kim, Dut LeBlanc,
Neil Lerner, Gary Lord, Lisa Madden, Dale LeMasters, Gary
Matuszak, Young Jin Park, Tim Pearson, Scott Reed, Chris
Rice, Greg Russo, Terri Santisi, Phil Schimmel, Ted Senko,
Richard Smith, Charlie Steadman, Ashley Steel, Ron Steger,
Claudia Taft, Mark Terrell, Dabie Tsai-Blake, Joseph Verga,
YG “Ken” Yun, and Hiroaki Yoshihara.
To the steadfast support of Rob Brownstein and McGraw-
Hill, and to Marie Glenn, for her assistance in researching,
writing and producing this book.
Mary Pat McCarthy
Timothy Flynn
November 2003
viii