The Rise and Evolution of the Chief Risk Officer: Enterprise Risk Management at Hydro One
Posted: 24 Nov 2004
This case study describes the successful implementation of enterprise risk management (ERM) at Hydro One Inc. over a five-year period. Hydro One is a Canadian electric utility company that has experienced significant changes in its industry and business. Hydro One is at the forefront of ERM, especially in utilizing a holistic approach to managing risks, and provides a best practices case study for other firms to follow. This article describes the process of implementation beginning with the creation of the Chief Risk Officer position (the rise of the CRO) and the deployment of a pilot study involving workshops conducted with one of the firm's subsidiaries. Various tools and techniques critical to ERM are discussed including the Delphi Method, risk trends, risk maps, risk tolerances, risk profiles, and risk rankings. As a last step, we explain how ERM has become such an integral and successful part of Hydro One's culture that the Chief Risk Officer may now be becoming redundant (the transformation of the CRO).
Keywords: Enterprise Risk Management, Chief Risk Officer, Delphi Method, Risk Map, Corporate Governance
JEL Classification: G31, G34
Suggested Citation: Suggested Citation