Session topics
Enterprise Risk Management
Linking strategy to financial objectives and risks
IFRS: An executive view
Emerging trends and best practices in budgeting
Using strategy maps to do risk-based strategy execution
Communication tools and techniques for executives
Enterprise Risk Management (ERM) for
competitive advantage
Speaker: Robert Torok, MBA, CA
A risk foreseen is half avoided. The foundation of any successful Enterprise Risk Management (ERM) program is
the identification of risks, in the context of an organization's strategic objectives, followed by risk
analysis, risk assessment and risk mitigation actions. This workshop will give you the critical elements
needed to make your organization's ERM program a success by enabling you to see many risks before they
occur and to take actions with a more complete understanding of the implications of those actions across the
enterprise. The content will be brought to life through a short case study which will give participants an
opportunity to apply the skills discussed during the workshop.
From
this session, attendees will:
• learn techniques and tools to identify risks;
• learn to work across organizational layers and boundaries;
• learn to manage correlated and compound risks;
• learn risk assessment and prioritization approaches; and
• gain a perspective on common risks and types of risks.
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Linking strategy to financial objectives and
risks
Speaker: Dr. Amin Mawani, PhD, LL.M, FCMA, CFP
Implementing an organization's strategy influences stakeholders' financial returns and risks and vice
versa. Executives therefore need to consider both the impact of organizational strategy on risk/return and
the impact of stakeholders' risk/return expectations on organizational strategy. Neither can be done in
isolation. Both need to be considered simultaneously in light of industry conditions, market conditions and
competitiveness of the sector. Accountability to stakeholders demands simultaneous consideration of both.
This session will elaborate on how some common strategic decisions can impact stakeholders' financial returns
and risks, as well as how stakeholders' financial expectations can shape organizational strategy.
After
this session, participants will understand:
• the link between an organization’s strategic objectives, risk and financial objectives;
• how stakeholders assess risk and financial outcomes; and
• how performance measures ought to be linked to decision rights and accountability.
Definition of terms
Organizational Financial Objectives
While accomplishing their strategic objectives, organizations also seek to meet the financial objectives that
are required by its stakeholders. Such stakeholders generally require a risk-adjusted return on their capital
that is commensurate with that offered by other organizations of similar risk. This required return is
influenced by industry conditions and competitive strategy.
Assessing the risk of an organization
The risk of an organization refers to the variability of the returns or cash flows generated by the firm.
Regular assessment of the variance of key performance measures is highly recommended for all
organizations.
Financing Policy
The risk or variability of an organization’s cash flows and its tax position determine the amount of debt in
its capital structure. Failure to meet regular debt payments can trigger violations of debt covenants that
may require restructuring or renegotiation of debt. Frequent operating losses may reduce a firm’s effective
marginal tax rate and thereby increase the after-tax cost of debt capital.
Investment Policy
Ultimately, value creation can only be accomplished through sustained positive cash flows in excess of the
cost of capital over time. Shareholder value (or stock price) is driven by entrenching such value creation in
shareholders’ expectations. Value creation is reflected by the growth in business. Sustainable growth
requires developing and maintaining a consistent set of business strategies, investment objectives, operating
goals and financial policies that reinforce each other rater than conflict. This requires reinforcing
incentives for measuring and rewarding long-term performance.
Accountability
Responsibility centres should be consistent with how senior management decides to allocate decision rights to
middle management. They should reflect operational independence, separable costs and revenues, and senior
management intent. The three pillars of sound organizational architecture include:
• Allocating decision rights to individuals who have the knowledge to make decisions
• Linking performance measures to the decision rights granted
• Linking rewards to the performance measures selected
Alignment of these three pillars is necessary for an organization to function well in a decentralized context
where managers can reasonably anticipate external shocks and react effectively to them.
Dividend
Policy
In a competitive financial market, shareholders will demand a return on equity that is commensurate with the
riskiness of the firm’s cash flows. Firms can offer such returns via dividends or capital appreciation in
stock price. While the tax differential between dividends and capital gains at the personal level is largely
disappearing, some shareholders may still have a preference for regular cash distributions as they believe
such discipline may keep management’s feet to the fire. This explains why some income trusts may decide to
not convert back to corporate form even after the tax advantages of being an income trust largely
disappear.
Tax
Strategy
Senior management remains responsible for incorporating effective tax planning into all business decisions.
Such tax planning cannot be done in isolation or after the business decisions have been taken, since most
business decisions have a direct impact on the tax position of a firm and vice versa.
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IFRS: An executive view
Speaker: Karine Benzacar, MBA, FCMA, CPA (Del)
IFRS
(International Financial Reporting Standards) is coming to Canada. By 2011, all publicly accountable
companies, public companies listed on the Toronto Stock Exchange and crown corporations, will be required to
report their financial results using IFRS instead of Canadian GAAP. These requirements include reporting a
2010 balance sheet (the opening balance sheet for 2011) under IFRS.
Accountants and preparers of financial statements will need to be aware of the technical details of IFRS.
However, senior executives and members of the C-Suite need to be aware of the impact of IFRS on their
organization and their role in terms of ensuring a smooth transition and reviewing IFRS statements.
At the
end of this workshop, participants should be able to:
• identify the impact of IFRS on their organization;
• determine whether their organization is IFRS-ready;
• understand areas their organization needs to review prior to releasing IFRS statements; and
• increase their comfort level in signing off on the first IFRS statements.
Workshop format
This workshop is highly interactive. Participants will learn the international financial reporting
standards by working through hands-on exercises and examples which compare Canadian GAAP to IFRS. This
workshop will also present financial information from public companies which shows the impact on the
financial statements of using different accounting standards. The workshop is also oriented towards
senior-level executives and will not cover the material at the depth which would be required for analysts,
managers, and directors.
Specific
topics to be covered:
- Overview of IFRS
- Who, what, where, when and why
- Major differences between IFRS and Canadian GAAP
- Key accounting changes
- Fixed assets – valuation, depreciation, impairments
- Fair value measurements vs. historical cost
- Cash Generating Units (CGUs)
- Leases
- Provisions and contingent liabilities
- Constructive obligations
- Onerous contracts
- Financial statement presentation – a new look and feel to financial
statements
- Statement of financial position
- Statement of comprehensive income
- Statement of cash flows
- Statement of changes in equity
- Reconciliation schedule (cash flows to comprehensive income)
- New information in financial statement notes
- Impact of IFRS on key ratios and possible impact on bank covenants
- The year of transition and important dates
- Impact of IFRS for senior executives and boards of directors
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Emerging trends and best practices in
budgeting
Speaker: Karine Benzacar, MBA, FCMA, CPA (Del)
Budgeting ranks as one of the most stressful and hectic tasks for financial professionals, yet it is one of
the most important duties of a CFO. Very few companies are satisfied with the current budgeting
processes; common complaints include that budgets take too long to develop, involve too many people and too
much rework and are often obsolete before they are put into practice. In today's fast-paced business
environment, the traditional budget is no longer serving its purpose of inspiring managers to achieve the
corporate strategy of the organization. In fact, managers seem to get more caught up in the mechanics
of budgeting than pursuing corporate goals or strategies. This session will explore some of the common
pitfalls of traditional budgeting, review why traditional budgeting techniques are not as effective as they
should be, and discuss the new and emerging best practices which are replacing traditional budgeting.
It will also discuss some case studies of successful companies which have implemented the new
processes.
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Using strategy maps to do risk-based
strategy execution
Speaker: Dr. Norman Sheehan, PhD, CGA, CMA
Using
practical examples, this presentation will outline how strategy mapping can be used to identify and assess
strategic risks. It then outlines four levers managers can use to manage these risks and improve their
strategic execution capabilities.
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Communication tools and techniques for
executives
Speaker: Kirby Wright
This session will involve a discussion about communication tools and techniques for executives.
Participants will be interacting throughout the conversation, and Kirby Wright will moderate and lead the
discussion.
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