Placing of Risk Analytics - for your comments

Rick --

Amr makes some good points. Specifically, I think that having Amr report t=
o=20
you directly would allow his "audit" function to receive the necessary=20
independence and support. More importantly, I think that you could use Amr=
=20
as a "test" whenever confronted with large differences. Finally, his=20
reporting to you gives you a very valuable resource to use as you see fit=
=20
across the organization.

Let's talk.

Jim

---------------------- Forwarded by James D Steffes/NA/Enron on 04/26/2001=
=20
08:21 AM ---------------------------
From: Amr Ibrahim@ENRON_DEVELOPMENT on 04/20/2001 09:19 AM
To: James D Steffes/NA/Enron@Enron
cc: =20

Subject: Placing of Risk Analytics - for your comments

Jim:
This short note is to highlight the salient reasons for recommending Risk=
=20
Analytics to remain reporting to you as a "first best" option. If this is=
=20
not tenable, the "second best" option is for the unit to report to Rick=20
Shapiro. =20

Risk Analytics is function that is ought to be performed holistically acros=
s=20
all of Enron=01,s business units and regions. Limiting it to EES (even by=
=20
implication) is likely to reduce its effectiveness in measuring the=20
regulatory risks across the board.=20
Risk Analytics is function that ought to be performed in an independent=20
manner so that to convince all of Enron=01,s business units of the arm-leng=
th=20
nature of the exercise. Linking it to EES (even by implication) may reduc=
e=20
openness of the target group be that an activity or a region. The experien=
ce=20
so far is that this openness was essential in securing channels (formal and=
=20
informal) for communication and feedback that resulted in much higher level=
s=20
of cooperation and information exchange.=20
Risk Analytics function tends to be slightly aggressive and tenacious in=20
nature; it digs deep into deals and processes. An independent unit is bett=
er=20
capable of reflecting this characteristic to the benefit of all of GA units=
,=20
but be solely responsible for the shortcoming, if any. =20
Risk Analytics requires a superb communication interface to ensure entry to=
=20
deals and processes on one hand, and communicate results on the other. It=
=20
requires a very efficient, highly developed, and effective platform that ca=
n=20
take its comments and products to literally all levels of Management in the=
=20
Corporation in the Americas and overseas. =20

Please let me know if you would like to discuss these points further.

Brgrds

AI