HPQ Enterprise Risk Management Program

Next let’s take a look at HPQ. We can see from its 10K
that HPQ is exposed to the following key business risk exposures:

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v  Significant
competitive pressure.

v  Unable to produce
quality products.

v  Fluctuations in foreign
currency exchange rates.

v  Economic
weakness/uncertainty.

v  Failure to manage
distribution products.

v  Business
disruptions could seriously harm future revenue.

v  Unable to enforce
intellectual property rights.

v  Successful
third-party claims of intellectual property infringement.

v  System security
risks, data protection breaches and cyber-attacks.

v  Failure to comply
with customer contracts/government contracting.

v  Failure to
maintain firm’s credit ratings could adversely affect liquidity, capital
position, borrowing costs and access to capital markets.

v  Unanticipated
changes in tax provisions.

v  Terrorist acts,
conflicts, wars and geopolitical uncertainties.

 

HPQ
has a robust Enterprise Risk Management (ERM) program1 to
help manage its risk exposure and build strategies to offset the business risks
effectively. The ERM program helps to clearly define risk management roles and
responsibilities, bring together senior management to discuss risk exposures
and facilitate appropriate risk response strategies. The ERM program run is by
management. The Board oversees management’s implementation of ERM program. In figure 2.5 we can see the reporting
structure of the ERM framework at HPQ. The key functions of the ERM program includes:
developing a risk portfolio by performing targeted risk assessments, developing
risk response plans, monitoring identified risk focus areas and lastly report
on risk portfolio and risk response to senior management and Audit Committee.

1
Board Risk
Oversight,
h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/reports/2017/2017-hp-inc-proxy-statement.pdf