Assessing the risk position of Enexis

Research to a methodology to assess the overall risk position of Enexis

Auteur: B. Peppelman

Risk management is of major importance for companies nowadays and the lack of it can have enormous consequences as it is currently illustrated by the world wide credit crunch. Enexis uses risk management on a corporate and operational level. On the operational level Enexis uses risk management to find the optimal way to manage its physical asset base. Therefore Enexis is availed by an adequate operational risk management process. In this research a risk is defined as an event with a certain probability of occurrence, which negatively affects one of the business values of Enexis.

Enexis uses asset management to meet its mission, to be and stay an excellent network operator, and to meet the goals related to this mission. To be able to take complex decisions over the large number of assets, which show a big diversity, Enexis implemented the Risk Based Asset Management (RBAM) methodology (Essent Netwerk, 2006). This methodology has to guarantee an optimal risk reduction within the existing constraints of available funds and people. Within the current methodology most risks are treated as individual events that happen independent from each other. In practice risk are not independent events and for some risks policies are already in place. The current risk management process results in a overestimated risk position. Due to problems with interrelations/overlap the calculated risk position of Enexis shows an over-estimation of the true position. A over-estimated risk position may trigger more actions and expenses than can be justified on the basis of the actual risks Enexis faces. Eventually this may lead to a culture of incorrect decision-making and overspending Therefore Enexis want to optimize their risk management process. Hence the goal of this research is:

How can Enexis determine its risk position, make the effectiveness of her policy on the risk position theoretically and practically provable and how could this be secured in the future?