An important best practice recommendation of our panel is measuring success It is key to gaining upper management s support as well as an ongoing commitment to risk management throughout the organization To measure success risk managers need to understand the total cost of risk which includes premium claims below deductible internal costs external vendor costs and reputational risk Risk managers need to establish appropriate tracking metrics and then consistently measure the program s progress There are several metrics our panel recommends for tracking suc cess including FM Global s RiskMark RiskMark is a fact based ana lytics tool to help companies quantify and manage property risks It enables risk managers to precisely understand the risk of major property loss at each facility the potential business impact and the best solutions to address these vulnerabilities Other metrics to measure success include claims closure and rec ommendation completion rates Measurement could also include track ing movement in percent of highly protected risks and tracing progress on established risk improvement plans or on a current vulnerability that risk management is looking to improve These metrics should be presented to management and key stake holders This can be done through communication vehicles like a score card or annual report The reporting should use succinct prose and persuasive quantitative data such as premium savings costs vs expen ditures and positive reports from regulators When presenting this type of information take care to tie risk to sustainability and if appropriate tie achievements in the areas of envi ronmental health and safety EH S and life safety External auditors loss control specialists insurers and brokers can help measure risk management success as well as help present on the results favorably Our panel recommends communicating basic expectations across the entire organization and providing recognition when significant mile stones are reached 6 MEASURE AND REWARD SUCCESS Good risk management practices enhance shareholder value You don t have to think in terms of disasters happening or their adverse effects being avoided Effective supply chain risk management should be embedded in a well run business and I think overall this will positively affect the share price ANDY BRYSON GROUP INSURANCE AND RISK MANAGER COBHAM PLC We made a significant upgrade to sprinkler protection in our Kleve Germany facility The project was not cheap To justify the project we took a look at the value of the property and more importantly the business inter ruption cost to that facility to see how that would impact AMETEK The impact on us for not completing this recommendation in the event of catastrophic failure or fire at this facility would greatly outweigh the cost of the installation The overall impact on AMETEK shareholder value was a critical factor that helped sell this project MARK SCHEUER DIRECTOR COMPLIANCE AMETEK INC ISSUE 2 2015 REASON 47

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