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Brian W. Merkley co-authored book on enterprise risk management

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Brian W. Merkley, global director of corporate risk management at Salt Lake City-based chemical manufacturer Huntsman Corp., is so passionate about enterprise risk management he has helped write a book about it.

“Enterprise Risk Management: Trends and Emerging Practices,” which is still in print, was published 14 years ago with co-authors Mr. Merkley, Kevin Hively and Jerry A. Miccolis, with Mr. Merkley the primary coordinator on the project. Mr. Merkley was a Dallas-based risk management consultant with Tillinghast-Towers Perrin Inc., now part of Towers Watson & Co., at the time.

It took a year to complete, but “it was a fascinating study,” he said, that involved a survey of global organizations and case studies of different organizations and their approach to enterprise risk management, which was “something that I certainly had a lot of interest in.”

Mr. Merkley said shortly after he joined Huntsman, the company's treasurer at the time was asked to participate in a roundtable on risk management, but had a scheduling conflict, and asked Mr. Merkley to go in his place.

He called Mr. Merkley into his office and said, “What they really want to talk about is ERM. I don't know how much you really know about this topic, but I've got this book” — and handed Mr. Merkley a copy of his own book.

When Mr. Merkley pointed out to the treasurer that he had co-authored it, the treasurer chuckled and said, “All right, I'm sure you can handle it,” he said.

Not long after that meeting, Huntsman put together a treasury/risk council whose participants include key company leaders around the world who manage issues such as foreign exchange risk, credit risk and capital structure and hazard risks in addition to risk management, Mr. Merkley said.

“We've been meeting monthly ever since,” he said.

The company also has conducted an enterprise risk assessment, which it updates typically every two years in addition to making regular reports to the board, Mr. Merkley said. “We're coordinating the process by which senior business leaders or senior functional leaders present to the audit committee on specific risks.”

This has led to a number of spinoff projects, Mr. Merkley said. For instance, the company is now digging deeply into the issue of single-source suppliers, which emerged out of the 2011 tsunami in Japan and flooding in Thailand.

Mr. Merkley said Huntsman had asked FM Global to do a study of its pigments division worldwide, and one of the factors highlighted in the report was the company's reliance on single-source suppliers. That led to the companywide study of the issue, he said.

There are a number of reasons as to why companies may have sole-source suppliers, Mr. Merkley said. It is a matter of “understanding what are the various tools we can bring to bear to understand the risk and manage it.”

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