Student Fellows Visit Industry Leaders in Chicago

This past month a group of 14 Student Fellows traveled to Chicago, Illinois and spent two days visiting corporate offices and meeting with risk management industry professionals.

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The first stop was at the CME Group global headquarters in downtown Chicago, on Thursday, October 20th.  Student Fellows were engaged in hearing how the CME Group, as the world’s leading and most diverse derivatives marketplace, manages such a large marketplace filled with risk. Fellows met with a variety of experts at CME Group who are involved in all the facets of risk that CME Group faces. The opportunity for Fellows to ask questions to these risk professionals and hear their thoughts on risk related topics was the most exciting part of the visit. An additional highlight was touring the CME Group Global Command Center.

Later that evening the Fellows attending a reception to network with K-State Chicago area alumni working in risk related fields. Fellows appreciated the time with these alumni and acknowledged that one of the biggest benefits of the CRMER fellowship program and off-campus industry visits like this trip is being able to network with and ask questions to professionals. Fellows would also like to thank again, R.J. O’Brien for sponsoring this reception.

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Friday, October 21st the Fellows started the day with a visit to the Aon Center, the company’s former global headquarters. Students were educated on the history of Aon’s business and the variety of career tracks available at the company. Students were most interested in hearing about examples of Aon’s clients and how Aon is able to develop risk management solutions for a large variety of clients. Following lunch, the Fellows were treated to a trip up to the top floor of the Aon Center to look out at the Chicago skyline.

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Before returning back to Manhattan, Student Fellows ended the trip with some sightseeing, including a stop at the infamous Bean to take a picture! CRMER would like to again thank both CME Group and Aon for their hospitality and continued commitment to education through their support of our program.

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Gavilon Hosts Fellows in Omaha

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By Olabisi Ekong, MS Agricultural Economics

The Center for Risk Management Education and Research (CRMER) Student Fellows visited Gavilon Headquarters’ situated in Omaha, Nebraska on Monday, August 29, 2016. Gavilon is a leading commodity management firm connecting producers and consumers of feed, food, fertilizer and fuel all over the world. They have presence in Asia, South America, Europe, North America and Africa. We were welcomed to the company by Patrick Burke, Marketing & Communications Supervisor, who led us on a tour of their trading floor where price discovery and risk management strategies were implemented.

Ed Prosser started the presentation with a brief description of his background and experience. He grew up on a farm in Dodge City and graduated from Kansas State University with a degree in Agricultural Economics in 1985 (GO WILDCATS). He is presently the Chief Trade & Risk Officer in Gavilon and has over 30 years’ experience in risk management. He is also a member of the Commodity Markets Council board of directors, Chicago Board of Trade and Minneapolis Grain Exchange. Furthermore, Ed gave us a brief history of Gavilon, the commodities they manage (grains, fertilizer, food and feed ingredients) and their locations.

Ankush Bhandari, Vice President of Economic Research spoke to us about ‘Emerging trends in agriculture and energy’. He enumerated various factors affecting supply and demand leading to the volatility in food prices. These factors include increase in global population, government policies, GDP rates and acreage and yield in agricultural production. He explained using various examples to highlight the fact that every activity in the world is intertwined and has a way of affecting the price of agricultural produce whether in a positive or negative manner.  He ended with a quote from David Ricardo – ‘The world will always raise the most food in the most economically way if the farmer grows the best crop in its soil and climate and trade with others’

Finally, Human Resources discussed with us on the various career opportunities (full time positions and internships) available at the company explaining employee benefits and paths to a successful career.

At the end of the presentations there was an interactive session where Ed answered questions, gave us insights about his experience in the risk industry over the years. CRMER Fellows appreciated Ed’s insights: use skills acquired as fellows for securing jobs and for decisions making whether in a managerial position or as entrepreneurs, be flexible in job locations now when young as our focus will differ once we start having families.

The Fellows at the Center for Risk Management Education and Research greatly enjoyed the presentations and insights shared by the speakers. We very much appreciate Gavilon’s hospitality and commitment to education through their support as founding partner of CRMER.

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Student Fellow Trip to Washington DC

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The 2016-17 class of Student Fellows went on the Center’s first ever trip to Washington DC this past May. The Fellows spent two days packed full of discussions and visits with various professionals working in risk management related fields in the DC area.

The Student Fellows would like to thank Jon Hixson & Cargill, Gregg Doud & CMC, as well as Todd Kemp & the National Grain and Feed Association for helping sponsor portions of this trip! We also would like to thank Colin Woodall and the National Cattlemen’s Beef Association for their hospitality both Monday and Tuesday.

Monday’s events focused on a wide variety of risk philosophies, applied strategies, and real risks the world is currently facing. Below are highlights about each guest speaker.

005Colin Woodall, Senior Vice President of Government Affairs for the National Cattlemen’s Beef Association spoke about the issues impacting the cattle industry, many of which Woodall commented, are the same issues NCBA has been managing since its initiation back in 1898. The Student Fellows were interested in hearing how much research and outreach the NCBA invests in in order to educate its members and manage the risks associated with the cattle industry.

risk_cooperativeAndres Franzetti, Chief Strategy Officer at The Risk Cooperative discussed with Student Fellows the shift from risk management as a way to prevent a loss into risk management as a means for opportunity and growth. Andres shared how with this philosophy, the Risk Cooperative is able to approach a risk management structure that is not off the shelf, but can work with a creative approach that makes sense and can still have success. Student Fellows were highly engaged in Franzetti’s insight about taking proactive measures to move risk from a cost to a catalyst.

Alex Manning, Senior Government Relations Director at Arent Fox spent his time with the Student Fellows discussing cyber security and cyber risk. Manning examined the issues regarding privacy versus security, specifically what does the government have the right and duty to protect. Student Fellows appreciated Manning’s advice on monitoring web security and how to be tactical in preventing security and data breaches.

Dave McIndoe, Partner at Sutherland spoke to the Student Fellows about his experience with advising clients on various trading transactions. Specific topics that McIndoe covered with the Fellows included the topic of reputational risk, as McIndoe commented, these forms of risk cannot be solved with dollars. Student Fellows appreciated McIndoe’s thoughts on trading, including how bad trading is expensive and when trading, you should always have accurate information.

Gregg Doud, President of the Commodities Market Council discussed with Student Fellows how CMC advocates for industries involved in areas including agriculture, energy and finance. The Student Fellows were fascinated in Doud’s wealth of knowledge in risk management and how it can be applied to the global market.

Tuesday’s events covered a lot of legislation and how professionals in or involved with the government use risk management to help make educated and appropriate decisions.

029Todd Kemp, Vice President of Marketing and Treasurer at the National Grain and Feed Association, and Advisory Council Member of the K-State Center for Risk Management spoke to the Student Fellows about an overview of the NGFA. Student Fellows were captivated in hearing about how the implementation of the Dodd Frank Act and other regulations continue to affect the market. Kemp discussed services and polices that the NGFA is currently working on in advocating for growth in agriculture.

035Michael Torrey, Principal and Founder of Michael Torrey Associates introduced students to lobbying and how lobbying intersects with risk management. Torrey addressed the stigma often associated with lobbyists by clarifying that lobbyists are solely advocating on behalf of what they believe in. Student Fellows were interested in hearing the details of effective lobbyists, especially the most significant aspect when advocating on behalf of an issue is knowing all the associated factors. Torrey shared several stories about the lessons he’s learned throughout his career, the most important word of advice he shared with the Student Fellows was be nice to everybody.

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Senator Roberts, United States Senator for Kansas and Chairman of the United States Senate Committee on Agriculture, Nutrition and Forestry welcomed the Student Fellows into his office on Capitol Hill. Senator Roberts discussed the present issues the Senate Agriculture Committee is currently involved in. Student Fellows were very thankful for the time Senator Roberts took to meet the Fellows and take a few pictures with us.

063Janae Brady, Wayne Stoskopf, Will Stafford, Anthony Seiler, and Matt Erickson- Following the visit with Senator Roberts, the Student Fellows met with several of Roberts’ staffers. Brady, Stoskopf, Stafford, Seiler, and Erickson met with the Students in the Russell Hearing room where they explained the basics of the hearings Senator Roberts and his staff are involved in. The Student Fellows were most excited about hearing from the staffers what exactly their jobs entail. Everyone agreed that they enjoy working for Senator Roberts and the causes he and his staff support. The Student Fellows were intrigued by the vital roles all play behind the scenes that allow them to have a greater impact on the agriculture industry.

Hannah Ropp, Surveillance Analyst at the United States Commodity Futures Trading Commission- Student Fellows completed their trip in DC with a visit with Hannah Ropp, Surveillance Analyst at the CFTC. After already hearing from a majority of supporters of free and fair trade, there was a dynamic shift for the Fellows to hear from Ropp who works for the CFTC, responsible for regulating the markets. Ropp addressed the stigma with regulation, telling the Fellows, the CFTC is most interested in keeping the markets safe and fair, otherwise no one would want to trade. Ropp discussed how much of her job involves surveying large amounts of data, looking for patterns and trends. Student Fellows were really interested in hearing about Ropp’s experience in market regulation and were curious about Ropp’s career aspirations.

The Student Fellows had a wonderful time in DC, we learned a great deal about innovative risk management strategies and we returned to K-State full of new ways of thinking about risk management and how it is applied to real world issues. Thank you again to all of our guest speakers, we really appreciated your time and thoughts that you shared with us!

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Risk Management Workshop Featuring Daniel Wagner

On Friday, April 8th the Student Fellows were treated to a full day workshop featuring Daniel Wagner, CEO of Country Risk Solutions. Daniel has more than 25 years of experience in political risk insurance, analysis and underwriting. His latest book, Global Risk Agility & Decision Making is available this May.
 
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Global Risk Management, the topic of Daniel’s newest book was the overarching theme of Friday’s workshop. Daniel discussed risk as being equal to probability multiplied by consequences. Daniel discussed details regarding some of the risks that we face today including terrorism, cyber risk, and climate change. Good risk managers must be decisive and capable of properly analyzing data in risk assessments. Daniel shared with the Student Fellows that finding good data is easy, but accurately interpreting data poses a greater challenge. Student Fellows were reminded of risk assessment guidelines including, know your sources, question the objective, and sometimes trusting a gut instinct is more important. Daniel encouraged Student Fellows to change their way of thinking by ‘turning the pyramid upside down,’ using old ways of thinking and doing, and failing to have a long-term orientation will no longer get the job done.
 
Daniel spoke of risk agility and the need for agile risk managers who are proactive about risk. Unlocking the value of risk involves ‘doing the right thing’ and remaining transparent when faced with bad news. The goal of the risk agile is not to thrive in this challenging world, it is to survive in it with a clear conscience.
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The Student Fellows really appreciated Daniel’s expertise and resources on the subject of risk management and country risk analysis. Having an open Q&A session at the conclusion of the workshop was beneficial to everyone interested in learning more about Daniel’s personal work experience and extensive traveling around the world. Student Fellows look forward to applying the concepts learned from Daniel’s workshop to our future careers.
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Special Guest Justin Ransom speaks about Supply Chain Management

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Ethan Fowler & Luke Minear

On March 28, CRMER Student Fellows were able to welcome the Senior Director, Supply Chain Management, Quality Systems at McDonald’s, Justin Ransom PhD. Justin began the foundation of his education with a B.S. in Agriculture Communications and Marketing at Texas Tech. He then moved a bit north, to Michigan State University where he receive his M.S. in Animal Science. Following his time at Michigan State Justin moved to Colorado to complete his education with a PhD in Animal Science and Food Safety from Colorado State University.

Justin’s main talking points throughout the learning seminar were largely about supply chain management and how it affects our lives. He stressed the 3 stool business model which includes an equal shared responsibility between suppliers, owner/operators, and the head corporation. This method is partially behind what has helped McDonald’s become such a competitive and successful corporation. He also talked about how this point in history can be defined as the ‘Age of the Customer.’ For many of us Student Fellows this was a new and interesting concept on the current interaction between sellers and buyers in the market place. Justin explained that by understanding this relationship model, McDonald’s is building for the future.

The most interactive part of the seminar was the open floor discussion. This was an amazing opportunity to talk with one of the world leaders in supply chain management. His insight into the business world was something far more educational than a traditional classroom setting. We discussed a wide range of topics from the past, present, and future strategies for business. We would like to thank Justin Ransom for making this opportunity possible.

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Mike Bernard from Union Pacific Discusses Enterprise Risk Management with Fellows

Youwei Yang

Mike Bernard, Director of Capital Planning and Finance for Union Pacific, met with the CRMER Risk Management Fellows on the afternoon of Tuesday, March 22nd. Bernard started the conversation by briefly talking about a movie, “Unstoppable”. The story in the movie was based on a real railroad accident that resulted in significant loss. Since the beginning of established business, the possibility of failure has always been an inherent risk for companies. Union Pacific takes into account many factors in their Enterprise Risk Management (ERM). Union Pacific has built a thorough system to identify, assess, analyze and manage risks. Potential events or situations that might threaten the success and longevity of the business are considered as risks, such as terrorism, cyber-attacks, cheap crude oil prices, debt crisis and climate change.

Enterprise Risk Management (ERM) is defined as a consistent and structured process across the whole business for identifying, assessing, deciding, and responding on threats and opportunities that affect the achievement of its objectives. ERM is affected by people at every level in the organization; it is applied in a strategy setting and top-down approach that aligns risk appetite and strategy. Two key factors of ERM are gross impact and likelihood of occurrence.

Reputation has been considered a major factor of Union Pacific’s structure. Bernard commented that “it takes years and years to build reputation, but only takes five minutes to destroy it.” This leads to the discussion of the levels and significance of risks because the ranking of enterprise risks changes over time. Some top historical ERMs include safety, security, service reliability, regulation and politics, economic and financial factors.  With the change in environment, top current ERMs contain terrorism, significant economic shift, federal statutory risk, international political risk, rail safety, severe weather impact and customer or commercial risk.

Many recent failures include the European and U.S. debt crises, city of Detroit, Kodak, BP deep water horizon explosion and many others.  Mr. Bernard challenged us to think about whether or not all risks are bad. We learned that risks can be opportunities to succeed and that avoiding risks is avoiding the chance to succeed. Bernard mentioned that the intelligent pursuit of rewarded risk forms the foundation of any successful business enterprise.  Oil price is a great example as the oil industry boomed last year and then oil price crashed this year. Union Pacific is the largest consumer of diesel in the world so the oil price fluctuations plays an important role in Union Pacific’s ERM portfolio.

Risk assessment of enterprise risks contain both quantitative and qualitative factors. Financial, reputational, speed of onset and frequency can all be noted as high, medium or low to assist the ERM decision making. Bernard brought up the example of two different hurricanes that landed in Houston. The first time caused Union Pacific’s activity in Houston shut down for 13 days, and the second time only for 3 days because they were well-prepared to prevent destruction from extreme weather. Bernard emphasized the importance of accurate monitoring systems and suggested to prepare early for risks.

Bernard mentioned some ERM lessons learned through experience. I think one of his most memorable comments is to expect the unexpected and plan for it. We always make assumptions and some of them are usually incorrect; Bernard asked us to challenge even our most basic assumptions. We took away from his lessons that extreme events happen more often than we think and we should always remain agile.

Some of the risk management Student Fellows asked Bernard questions and he enlightened us with great conversation. He discussed the ongoing analysis and implementation of an automatic stop system preventing trains from unexpected events. Bernard explained the advice of making front line operators aware of the risks and risk management through education, simulation and real world experience.

Learning the perspective of an industry-experienced and leading professional like Mike Bernard on enterprise risk management opened our eyes. The workshop brought more fresh ideas and confidence to risk management Student Fellows to pursue a career in risk management. Diverse factors of ERM trained us to think about business in a more integrated and global environment with economic, financial, climate, safety, politics and many other elements. After attending this guest speaker event Fellows will be striving to apply Bernard’s lesson of “challenging even our most basic assumptions.”

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Mike Bernard speaking with CRMER Student Fellows

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Renée Laird, Founder & President Tallgrass International, Shares Experience & Advice with Student Fellows

Emily Carls

On Monday March 7, 2016 the Student Fellows had the opportunity to listen to Renée Laird, Founder and President of Tallgrass International Ltd., speak about her career and lessons she learned from her work and life experiences. Renée Laird grew up in Rooks County, in western Kansas; she attended Kansas State University and graduated with a Bachelor of Science in Agricultural Economics. Following graduation, Renée obtained a job with Koch Industries in Wichita, Kansas, where she worked as a trader. While at Koch, she learned a great deal about risk and how to manage it.   Through her experience in managing price risk, this built the foundation for her moving forward. After Koch, Renée moved to New York to work as an Executive Director for Rabobank International. While at Rabobank International, Renée oversaw multiple facets of the business that further developed her expertise in risk management. The events of 9/11 ultimately compelled Renée to leave Rabobank in New York and move back to the Midwest for a trading and management role at a global broker/dealer and futures commission merchant in Chicago.  While at Fimat/Newedge, she managed a global business line as Global Head of Agricultural Commodities and OTC, as well as having direct oversight of the Chicago office as General Manager.  After Newedge, she headed up a commodities trading advisor as CEO, where she oversaw the strategy for restructuring, growing, and implementing infrastructure and teams leading to a doubling of assets under management for the hedge fund.  The Student Fellows were interested in hearing how Renée’s professional career took her to lead businesses across the United States and globe. In every position Renée has worked in her career thus far, it was evident to the Student Fellows that she took it upon herself to accept challenges and opportunities to learn new skills. With the variety of titles Renée has held, she has gained experience in many sectors of business including management, business strategy, budgeting, marketing, consulting, and sales. The knowledge gained through her career led Renée to establish Tallgrass International Ltd., which focuses on business and management consulting. Renée currently serves as the Founder and President of Tallgrass International Ltd.

While Renée’s resume showcases her impressive ability to manage risk in the professional world, she was also able to speak about her personal life and what she has learned in managing personal risk. Renée spoke of the challenges of being a female in the industry, being away from her home and family, and how life is not always a fairytale. The Student Fellows were delighted to hear about Renée’s personal life and her growing up in western Kansas. Renée’s roots share similarities to a handful of the Student Fellows of the Center, growing up on the family farm in a small midwestern community, being a member of 4-H, and eventually attending Kansas State University.

Listening to Renée gave the Student Fellows a different perspective on the industry as she has worked in a variety of executive positions allowing her to speak about the different challenges associated with each new job. In addition to learning from Renée the skills imperative for being an informed decision maker, Student Fellows also appreciated Renée’s guidance for the Fellows’ future careers and personal lives including: know the culture of a company, find a mentor, speak up, take risks, challenge yourself, network, be curious, and always stay connected to your roots.

The Student Fellows would like to extend a thank-you to Renée Laird for taking time out of her busy schedule to visit with us, answer our questions, and share with us her personal and professional life experiences.

 

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