explorer pipeline services company risk assessment diagnostic results

8/9/2019 Explorer Pipeline Services Company Risk Assessment Diagnostic Results

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Risk Assessment Diagnostic:

Explorer Pipeline Services Company


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Finance Leadership Exchange

Roadmap for the Presentation

AppendixOverall Results Sectional Scores


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Top Ten Risks by Importance - Aggregate Scores

"egend :

a Staff Bench Strength Risk

- Environ"ental Risk

c &atastrophic Loss Risk

d Regulator) Risk

e Succession *lanning Risk

f &o"pensation and Benefits Risk

g +anage"ent ,urnover Risk

h *ipeline Relia-ilit) Risk

i Financial /ealth0Econo"ic 1ncertaint) Risk

Environ"ent2 /ealth 3 Safet) RiskSlo6

7er) Rapid

Rapid

Risk !eocity


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Risk Importance Standard Deviation Scores

Risks #ean Standard Deviation

Financial /ealth0Econo"ic 1ncertaint) Risk 5.54 (.(5

+arket 8ecline Risk 5. (.$

Staff Bench Strength Risk 4.' (.'

9ndustr) Risk 4.'% (.'

&o""odit) Risk 4.!4 (.%

Average 7alue

: ( Standard 8eviation


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Top Ten Risks by Impact - Aggregate Scores

Top Ten by Impact Impact Score "ikeihoodScore !eocity Score

&atastrophic Loss Risk .'5 %.' 5.!

Financial /ealth0Econo"ic 1ncertaint) Risk .4! 4.'# 4.4(

9ndustr) Risk .(( %.$4 #.55

+arket 8ecline Risk 5.$5 4.% #.!5

*ipeline *roduct &apacit) Risk 5.'! %.! 4.#%

Environ"ent2 /ealth 3 Safet) Risk 5.' #.# 4.''

*roduct 8e"and Risk 5.%' #.$ %.#

&usto"er Satisfaction Risk 5.#$ #.%$ %.(

&o"petition Risk 5.#4 %.! #.$5

Regulator) Risk 5.$ 4.(% #.4#


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Top Ten Risks by Impact - Aggregate Scores

Slo6

7er) Rapid

Rapid

Risk !eocity

"egend :

a &atastrophic Loss Risk

- Financial /ealth0Econo"ic 1ncertaint) Risk

c 9ndustr) Risk

d +arket 8ecline Risk

e *ipeline *roduct &apacit) Risk

f Environ"ent2 /ealth 3 Safet) Risk

g *roduct 8e"and Risk

h &usto"er Satisfaction Risk

i &o"petition Risk

Regulator) Risk


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Top Ten Risks by "ikeihood - Aggregate Scores

Top Ten by "ikeihood Impact Score "ikeihoodScore !eocity Score

Staff Bench Strength Risk 4.! 5.4% 4.


&o""odit) Risk 5.' 4.# %.$#

&o"pensation Risk %.!( 4.%! %.4



9ndustr) Risk .(( %.$4 #.55

Leadership Risk %.%' %.$% %.%#




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Top Ten Risks by "ikeihood - Aggregate Scores

Slo6

7er) Rapid

Rapid

Risk !eocity"egend :

a Staff Bench Strength Risk

- Financial /ealth0Econo"ic 1ncertaint) Risk

c &o""odit) Risk

d &o"pensation Risk

e +arket 8ecline Risk

f Regulator) Risk

g 9ndustr) Risk

h Leadership Risk

i &o"petition Risk

*ipeline *roduct &apacit) Risk


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Risk "ikeihood Standard Deviation Scores

Risks #ean Standard DeviationStaff Bench Strength Risk 5.4% #.%'

Financial /ealth0Econo"ic 1ncertaint) Risk 4.'# (.($

&o""odit) Risk 4.# (.%%

&o"pensation Risk 4.%! #.4

+arket 8ecline Risk 4.% (.!$

Average 7alue



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$ategory- %ise Aggregate Scores

Risks by $ategory Impact of Risk"ikeihood of

Risk!eocity of

Risk

Strategic Risks 4.$( %.4' %.(5

Financial Risks 4.4% %.(% %.%5

Operational Risks %.' #.$ %.#$

Legal0&o"pliance Risks 4.( #.#! %.#4

9, 3 S)ste"s Risks %.$ #.4# %.5$


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$ategory- %ise Aggregate Scores

"egend :

a Strategic Risk

- Financial Risk

c Operational Risk

d Legal0&o"pliance Risk

e 9, 3 S)ste"s Risk

Slo6

7er) Rapid

Rapid

Risk !eocity


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Strategic Risks - Aggregate Scores

(

Strategic Risk Impact "ikeihood !eocity

&atastrophic Loss Risk .'5 %.' 5.!


&o"pensation Risk %.!( 4.%! %.4

&usto"er Satisfaction Risk 5.#$ #.%$ %.(

9ndustr) Risk .(( %.$4 #.55

9nvestor Relations Risk %. #.(' #.''


*ricing Risk 4.4 %.4% %.!$

*roduct 8e"and Risk 5.%' #.$ %.#


Sovereign0*olitical Risk %.'' #. #.

Staff Bench Strength Risk 4.! 5.4% 4.

Strategic 9nitiatives Risk 4.5 %.#! #.!(


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Strategic Risks Standard Deviation Scores


+arket 8ecline Risk 5. (.$

Staff Bench Strength Risk 4.' (.'

9ndustr) Risk 4.'% (.'

Regulator) Risk 4.5 (.5

&atastrophic Loss Risk 4.%! (.#4

Average 7alue



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Financia Risks - Aggregate Scores

Financia Risks Impact "ikeihood !eocity

Budget 3 *lanning Risk %.4 #.55 #.!

&o""odit) Risk 5.' 4.# %.$#

&ovenant Risk 4.!$ #.4 %.4

&redit Risk %. #.54 #.%(


Segregation of 8uties and 9nternal &ontrol Risk %.5$ (.5$ %.(%

($


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Financia Risk - Aggregate Scores

"egend :

a Budget 3 *lanning Risk

- &o""odit) Risk

c &ovenant Risk

d &redit Risk

e Financial /ealth0Econo"ic 1ncertaint) Risk

f Segregation of 8uties and 9nternal &ontrol Risk

Slo6

7er) Rapid

Rapid

Risk !eocity


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Financia Risks Standard Deviation Scores

Risks #ean Standard DeviationFinancial /ealth0Econo"ic 1ncertaint) Risk 5.54 (.(5

&o""odit) Risk 4.!4 (.%

&ovenant Risk %.% (.%

Budget 3 *lanning Risk #.'' (.'%

&redit Risk #.45 .$$

Average 7alue



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Operationa Risks - Aggregate Scores

##

Operationa Risk Impact "ikeihood !eocity

&apacit) Risk %.% #.$( #.!%

&hange Readiness Risk 4. %.( %.5#

&o""unications Risk %.## %.5 %.(4

&ontract 9nfor"ation Risk #.!( %.#' #.!(

Efficienc) Risk 4. #.% #.!$

E"plo)ee0,hird *art) Fraud Risk #.$ #.($ %.%5

Leadership Risk %.%' %.$% %.%#

+easure"ent Risk %. #.%5 #.5

Outsource *rovider Safet) Risk %.'# %.4% 4.(

*erfor"ance ;ap Risk 4. #.5 %.5

*h)sical Securit) Risk 4.!5 #.'! 4.#$

*er"itting Risk %.5 #.$4 #.4


*ipeline Relia-ilit) Risk 4.!' #.## 4.((

Suppl) &hain Risk 4.(' #.4! %.#!

,ea" Satisfaction Risk 4.(( %. #.''


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Operationa Risk - Aggregate Scores

"egend :

a &apacit) Risk

- &hange Readiness Risk

c &o""unications Risk

d &ontract 9nfor"ation Risk

e Efficienc) Risk

f E"plo)ee0,hird *art) Fraud Risk

g Leadership Risk

h +easure"ent Risk

i Outsource *rovider Safet) Risk

*erfor"ance ;ap Risk

k *h)sical Securit) Risk

l *er"itting Risk

" *ipeline *roduct &apacit) Risk

n *ipeline Relia-ilit) Risk

o Suppl) &hain Risk

p ,ea" Satisfaction Risk

Slo6

7er) Rapid

Rapid

Risk !eocity


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Operationa Risks Standard Deviation Scores


*ipeline *roduct &apacit) Risk 4.5% #.(

&hange Readiness Risk %.5$ (.44

*h)sical Securit) Risk %.5% (.45

Outsource *rovider Safet) Risk %.4( (.

,ea" Satisfaction Risk %.%% (.5

Average 7alue



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"ega&$ompiance Risks - Aggregate Scores

"ega&$ompiance Risks Impact "ikeihood !eocity

&o"pliance


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"ega&$ompiance Risks Standard Deviation Scores


Environ"ent2 /ealth 3 Safet) Risk %.!! (.

&o"pliance


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IT ' Systems Risks - Aggregate Scores

IT ' Systems Risks Impact "ikeihood !eocity

Business &ontinuit) Risk 5.4 #.!5 5.5

9nfor"ation Access Risk #.$5 #.4! %.%(

9nfrastructure Risk #.$% #.5 #.5

>et6ork0S)ste" Failure Risk %.'5 (.!$ %.5

#'


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IT ' Systems Risks - Aggregate Scores

"egend :

a Business &ontinuit) Risk

- 9nfor"ation Access Risk

c 9nfrastructure Risk

d >et6ork0S)ste" Failure Risk Slo6

7er) Rapid

Rapid

Risk !eocity


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IT ' Systems Risk Standard Deviation Report

Risks #ean Standard DeviationBusiness &ontinuit) Risk %.5% (.%(

9nfrastructure Risk #.!% (.#'

>et6ork0S)ste" Failure Risk #.5 .!$

9nfor"ation Access Risk #.44 .!$

Average 7alue



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Anaysis #ethodoogy

Ranking $ac(ation

,o deter"ine the ranking


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Risk Assessment Diagnostic S(rvey$ategories

Strategic Risks:

$atastrophic "oss Risk

Definition:,he risk thata "aorInatural or "anC"adeIdisaster could threaten the co"pan)Js a-ilit) to sustain operations2 provide essentialproducts and services or recover operating costs.

$ompetition Risk

Definition:,he risk that actions of the co"pan)Js co"petitors or ne6 entrants to the "arket threaten co"petitive advantage.

$ompensation Risk

Definition:,he risk that co"pensation and additional incentives are inadeHuate to "aintain the hu"an capital reHuired to sustain and gro6 the

-usiness.

$(stomer Satisfaction Risk

Definition:,he risk that a lack of appropriate focus on custo"ersJ needs and 6ants threatens the co"pan)Js a-ilit) to "eet or exceed custo"erexpectations2 resulting in poor custo"er retention.

Ind(stry Risk

Definition:,he risk that changes in opportunities and threats affecting the industr) threaten the attractiveness or longCter" via-ilit) of the industr).

Investor Reations Risk

Definition: ,he risk that "isrepresentations of co"pan) activities through "edia2 crisis or e"plo)ee co""unications eopardi?es investor

confidence in the co"pan).

#arket Decine RiskDefinition:,he risk that advances or changes in technolog)2 the -usiness environ"ent2 and0or consu"er ha-its 6ill drasticall) shrink the nu"-er of

custo"ers 6ho utili?e the co"pan)Js services.

Pricing Risk

Definition,he risk that a product2 good and0or service is severel) under or overpriced and causes the co"pan) to "iss out on potential profits.


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Strategic Risks *contd+, :

Prod(ct Demand Risk

Definition:,he risk that a scenario arises in 6hich the co"pan) cannot "eet the product de"ands of its custo"ers and the co"pan) loses out onpotential revenue.

Reg(atory Risk

Definition:,he risk that changing regulations threaten the co"pan)Js co"petitive position and capacit) to conduct -usiness.

Sovereign&Poitica Risk

Definition:,he risk that adverse political actions


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Operationa Risks:

$apacity Risk

Definition:,he risk that the i"ple"entation of a polic) or proect 6ill exceed the co"pan)Ks "anage"ent capacit).

$hange Readiness Risk

Definition:,he risk that the co"pan) is una-le to i"ple"ent process and product0service i"prove"ents Huickl) enough to "eet -usiness

reHuire"ents.

$omm(nications Risk

Definition:,he risk that ineffective co""unication channels "a) result in "essages that are inconsistent 6ith authori?ed responsi-ilities or

esta-lished perfor"ance "easures.

$ontract Information Risk

Definition:,he risk that insufficient or inadeHuate infor"ation is collected to track contract co""it"ents and to perfor" effective contract"anage"ent.

/fficiency Risk

Definition:,he risk that inefficient operations threaten co"pan)Js a-ilit) to provide service at or -elo6 co"petitor cost levels.

/mpoyee&Third Party Fra(d Risk

Definition:,he risk that fraudulent activities perpetrated -) e"plo)ees2 custo"ers or suppliers2 agents2 -rokers or thirdCpart) ad"inistrators against

co"pan) for personal gain


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Operationa Risks *contd+,:

Performance )ap Risk

Definition:,he risk co"pan) perfor"ance suffers in ter"s of Hualit)2 cost and0or c)cle ti"e due to inferior operating practices.

S(ppy $hain Risk

Definition:,he risk that a -reakdo6n in the "ove"ent of goods and infor"ation -et6een the organi?ation and its suppliers and custo"ers reduces

perfor"ance.

Team Satisfaction Risk

Definition:,he risk that tea" satisfaction declines causing poor tea" "orale2 6ork ethic2 and lack of productivit).

Pipeine Reiabiity Risk

Definition: ,he risk that failure to protect the organi?ationJs infrastructure2 personnel2 and critical infor"ation fro" cri"inal threats or attacks2 -oth

internal and external2 i"pairs the organi?ationJs a-ilit) to conduct -usiness.

Physica Sec(rity Risk

Definition: ,he risk that failure to protect the organi?ationJs personnel2 hard6are2 progra"s2 net6orks2 and data fro" ph)sical circu"stances and

events causes serious losses or da"age.

O(tso(rce Provide Safety Risk

Definition: ,he risk that a thirdCpart) provider of outsourced or contract services provides an unsafe and0or safet) deficient 6orking environ"ent

that exposes the organi?ation to lia-ilit)2 loss of -usiness reputation and other costs.

Pipeine Prod(ct $apacity RiskDefinition: ,he risk that "anage"ent fails to effectivel) prioriti?e and0or esti"ate "arket suppl) and de"and for pipeline throughCput capacit)

resulting in a failure to "aintain appropriate levels of petroleu" products in the pipeline


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IT ' Systems Risks:

(siness $ontin(ity Risk

Definition:,he risk that the -usiness could not recover in a ti"el) fashion in a disaster recover) situation.

Information Access Risk

Definition:,he risk that failure to adeHuatel) restrict access to infor"ation

explorer pipeline services company risk assessment diagnostic results

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