Office of the Chief Risk Officer Brochure

The ever-evolving complexity of today’s global corporate risk landscape requires holistic solutions for Chief Risk Officers and the corporations they serve.

Our solutions are flexible, dynamic, and customizable – allowing our clients to focus on the areas of risk that matter most. FTI Consulting’s multidisciplinary Office of the Chief Risk Officer (OCRO) solution is designed to identify, assess, evaluate, and respond to key risks across the enterprise, business lines, and geographies, helping organizations:

Achieve strategic objectives
Strengthen competitive advantage
Promote sustainability, diversity, and corporate citizenship
Make efficient and effective operational decisions
Preserve and enhance reputation
Detect and defend the company from threats
Avoid revenue losing events
Decrease business disruption
Address government inquiries

Top Concerns of a Chief Risk Officer

According to FTI Consulting’s 2021 Resilience Barometer survey, the following areas are top concerns for the C-suite:

Shortage in workforce and skills
Sustainability / Environmental, Social, and Governance (ESG) practices
Supply chain disruptions
Data privacy issues or use of third-party data
Cyber attacks and threats
Technology integration and innovation
Regulatory or political scrutiny
Business conduct and treatment of customers

Our Competitive Advantage

We provide our clients full-scale or targeted risk assessments, proactive process and control environment improvement capabilities, subject matter support, and investigative services for risk and compliance programs.

Extensive Experience. FTI Consulting's OCRO solution is comprised of former chief risk officers, chief compliance officers, policy makers, executives, regulators, cybersecurity experts, data scientists, actuaries, forensic specialists, strategy and crisis communications professionals, law enforcement and intelligence officials, insurance experts, and other critical subject matter experts with first-hand experience designing, assessing, and implementing leading risk management programs on a global scale.

Global Platform. FTI Consulting has nearly four decades of experience in impacting some of the world’s largest and most complex challenges, many of which have dominated global business, financial, and public policy discourse. With offices in every major financial center and across the globe, we successfully serve our clients wherever challenges and opportunities arise.

Integrated & Comprehensive. Individually, each practice is a leader in its specific field, staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle – from proactive risk management to rapid response abilities regarding unexpected events and dynamic environments.

Industry Experience. No two industries are the same. FTI Consulting provides the knowledge, focus, and skill to help clients compete in a global economy where success relies on crossing industries and borders. We offer deep, practical industry expertise to ensure that we deliver solutions that work.

Business & Strategic Risk

Enterprises are making strategic choices and business decisions in the face of complex and dynamic macro-economic, competitive, and regulatory landscapes, posing challenges and risks to the successful execution of an organization’s strategy.

FTI Consulting provides an integrated approach to strategic planning and risk management that emphasizes understanding, evaluating, and mitigating potential adverse scenarios to improve the effectiveness of strategic decision making.

Enterprise risk management
ESG, reputational, and strategic risk assessments, including: Customer behaviors, emerging technologies, competition, new products, political changes
Technology, digital, and cybersecurity transformations
Blockchain program development, implementation, and assessments
Comprehensive M&A due diligence
Audit and special committee investigations
Intellectual property protection
Risk retention and risk transfer modeling and analysis
Selection of appropriate risk treatment vehicles: Insurance, self-insurance, alternative risk mechanisms
Strategic insurance program right-sizing
Supply chain risk assessment and mitigation

Case Study - Emissions Assessment for a Natural Gas Distributor

Situation
A large distributor of natural gas retains FTI Consulting annually to evaluate the economic impacts of its investments and operations. In 2021, the company evaluated its Scope-1, Scope-2, and Scope-3 emissions for the first time, and we validated the findings using our Carbon and Regional Analysis Tool (CARAT).

Our Role
Using our proprietary CARAT model, we calculated Scope-1, -2, and -3 emissions from the company, which included its direct operational emissions, emissions from associated power generation, and emissions from suppliers.

Our Impact
We offered strategic recommendations to reduce the company’s greenhouse gas footprint and showed the economic contribution of the company to the local regional economies. The company uses this data annually in its ESG reporting on its environmental and economic impact.

Operational Risk

Organizations recognize the consequences of failing to maintain resilient processes and infrastructure to support their critical business services and protect their proprietary and third-party assets

FTI Consulting helps businesses evaluate and strengthen their current environments, holistically respond to incidents, and sustainably recover their operations and reputation after an incident has occurred.

People and change management
Operational resiliency and business continuity assessments, testing, and roadmaps
Third-party / vendor risk management
Master data management, information governance, and data privacy
Cybersecurity readiness, incident response, and investigation services
Technology risk management and IT disaster recovery support
Artificial intelligence (AI) enablement and model reviews
AI / machine learning bias and fairness review
Fraud risk management
Business and operational transformation
Product and transaction liability
Directors and Officers liability
Broker advisory and evaluation processes
Insurance renewal and risk advisory
Interim and outsourced risk management support
Business interruption and other coverage reviews and disputes

Case Studies - Ransomware Response for a Global Aerospace Manufacturer

Situation
A ransomware attack impacted eight of the company’s locations, requiring disparate IT teams to work in concert to restore business operations. Additionally, the client had legacy hardware connected to the network, which posed remediation risks.

Our Role
Our team was onsite at impacted locations within 24 hours. We focused on identifying the malware, performing forensic review, and liaising with law enforcement. We identified the manufacturing machines with vulnerabilities connected to the corporate network and isolated those machines and legacy equipment.

Our Impact
Due to the complexity of the existing infrastructure, reinfection was almost certain had we not isolated legacy workstations. Our remediation efforts significantly reduced the overall downtime, and we worked with the company to improve cybersecurity practices across the enterprise.

Financial Risk

Understanding, modeling, and predicting a company’s financial exposures has become an increasingly sophisticated practice.

FTI Consulting works with clients to identify risk drivers, define and model scenarios, and report and mitigate risks that they may face now or in the future.

Credit risk
Market risk (e.g., FX, interest rates, inflation)
Liquidity risk management
Asset and liability management
Capital management
Models and algorithms
SEC accounting advisory
Accounting and restatements advisory
Insurable and risk finance
M&A due diligence, integration, and carveout stand-up
Actuarial reserve analyses
Collateral and escrow analyses and right-sizing
Loss portfolio transfers
Securing excess of loss recoveries
Asset tracing and cryptocurrency investigations
Casualty claims modeling and analysis

Case Study - Due Diligence of a Futures Commission Merchant and Broker-Dealer

Situation
An investment manager was considering an investment in a large futures commission merchant and broker-dealer based in the United States, subject to an independent due diligence of the business.

Our Role
We reviewed the risk taking and the risk management of the various desks; analyzed the firm’s market, credit, liquidity, and operational risk frameworks, its systems, and its risk measures and reports; assessed the compliance framework; reviewed staff management; and evaluated the information technology infrastructure, systems and trade flows, business continuity planning, and cybersecurity posture.

Our Impact
The investment manager valued our deep industry expertise and trading/investment experience with high volatility environments that gave us a strong ability to understand key risk exposures.

Regulatory Compliance Risk

Organizations continue to face a more complex and rapidly evolving regulatory environment where the consequences of non-compliance can have severe financial and reputational impacts.

FTI Consulting identifies an organization’s regulatory obligations, anticipates future changes, implements robust compliance frameworks and infrastructure, and investigates and remediates deficiencies.

Compliance program assessment, development, remediation, and enforcement advisory
Bank Secrecy Act (BSA) / Anti-money Laundering (AML)
Anti-bribery and corruption / Foreign Corrupt Practices Act (FCPA)
Export controls and sanctions
Consumer regulation
Regulatory remediation (e.g., matter requiring attention, consent orders, enforcement actions, monitorships)
Cybersecurity compliance
Data privacy compliance
Ethics and integrity program development and training
Conflicts of interest
Taxation services
Economic sanctions analytics

Case Study - GDPR Assessment & Action Plan for a Global Energy Company

Situation
A U.S.-based drilling company with a significant international footprint engaged FTI Consulting to conduct a readiness assessment and provide a roadmap of additional steps needed to bring the company into full compliance under Europe’s General Data Protection Regulation (GDPR).

Our Role
In partnership with the client’s legal and compliance teams, our data privacy and information governance experts set out to understand the company’s U.S. and European systems and assess business activities against GDPR requirements.

Our Impact
We developed a detailed three-year roadmap with actionable steps for the client to reduce data privacy risk and ensure compliance for its European operations. Despite their initial belief that the company was minimally exposed under GDPR, the company was issued a data subject access request on the day its engagement with FTI Consulting concluded. The data map, action plan, and recommendations we provided were critical in arming the client with the information needed to respond.

Additional Case Studies

Business & Strategic Risk - Investigative Due Diligence for a Private Equity Fund

Situation
FTI Consulting was engaged by a Singapore-based private equity fund to investigate the reputation and background of an Australian IT company, its owners, and managers prior to an acquisition.

Our Role
Our research identified prior litigation relating to breaches of intellectual property, and our inquiries identified several product performance issues leading to the loss of key customers.

Our Impact
We provided a detailed overview of the current directors’ diverse business interests and reputations, which guided our client to formulate a sound post-acquisition strategy.

Operational Risk - Risk Management Digitalization for a Global Financial Institution

Situation
FTI Consulting assisted a global financial institution to digitalize risk management in its global securities, finance, and collateral management solutions business.

Our Role
We helped the client use machine learning (ML) to identify strategies providing stronger returns from lending patterns and to manage their risk. Our expert helped the client to write ML algorithms to analyze very large amounts of position and transaction data over time, thereby determining stocks with instantaneously higher lending rates compared to their lending histories.

Our Impact
The result: optimal delta hedges for the portfolio, forecast by ML, and algorithmic execution of the risk management strategies.

Financial Risk - Hedge Book Analysis and Restructuring for a European Airline

Situation
A European airline was facing a liquidity crisis in 2020 due to a decline in travel and losses incurred on its jet fuel hedge book from sharply lower fuel prices. FTI Consulting was retained to evaluate multiple proposals by its various counterparties for the hedge book restructuring and to negotiate new terms.

Our Role
We integrated the restructured hedge book as proposed by each counterparty into our proprietary analytics and risk management system, FTI Quantum, and provided real time valuation and risk analysis. We analyzed each of the proposals and valued the previous hedge positions which they replaced.

Our Impact
Our analysis helped the airline evaluate the different proposals to find the best fit for the company’s strategy and cash requirements. We helped negotiate with counterparties to limit costs and achieve more favorable terms, thereby reducing the financial risk of the hedge portfolio and making it more capital efficient. The client conveyed their appreciation, stating, “Your analysis has helped illuminate the black box for us and has been critical in understanding the business and assessing the key risks.”

Regulatory Compliance Risk - Ethical Sourcing Investigations for a Global Retailer

Situation
One of the world’s leading retailers sought a strategic global partner to assist with investigating numerous allegations of wrongdoing and/or non-compliance with its ethical sourcing policies and compliance program. The retailer wanted to identify and assess potential wrongdoing in operations in Mexico, Brazil, India, Pakistan, Bangladesh, China, Malaysia, and Cambodia.

Our Role
We assembled a team of seasoned investigators from around the globe to conduct sensitive investigations, including local public records research, confidential inquiries with in-country human sources, employee and third-party interviews, and document and communications analysis.

Our Impact
Based on our findings, we assessed the allegations relating to numerous possible violations of the retailer’s ethics policies and ethical sourcing guidelines, including employment of underage labor, health and safety violations, human rights abuses, falsification of documentation, non-payment of wages, and criminal or illicit operations. The retailer was also able to identify and assess numerous other instances of wrongdoing in its global operations.