Annual Report of the ERM Initiative July 1, 2007

Content ERM Initiative Vision, Mission, and Four Core Strategies Overview of Accomplishments 2006-2007 Preview of Planned Activities for 2007-2008

To be internationally recognized as an ERM thought leader. Vision To be internationally recognized as an ERM thought leader. Mission To be a national and international thought leader in enterprise risk management (ERM) and in the implementation of ERM in strategy development and corporate governance.

4 Pillars of Core Strategies Becoming internationally recognized thought leader Outreach Internet Research Curriculum

Overview of Accomplishments 2006-2007

Outreach - ERM Initiative Advisory Board Internationally recognized through our… Outreach - ERM Initiative Advisory Board Bank of America Public Service Enterprise Group, Inc. MasterCard International Kilpatrick Stockton, LLP EDS Protiviti, Inc. Reynolds American (RJR) Grant Thornton AllState Insurance Progress Energy BB&T Corporation Aon Risk Services, Inc. Nortel Retired – Home Depot McGladry Pullen University of Wisconsin – Madison Ernst & Young General Motors R&D Standard & Poors Wachovia PricewaterhouseCoopers, LLP Bristol-Myers Squibb KPMG, LLP Duke University Deloitte SAS Inc.

Internationally recognized through…. Outreach – ERM Roundtables 6 Roundtables featuring Wachovia AON Risk Services Reynolds American Cisco Systems Bristol-Meyers Squibb Internal Revenue Service and Securities & Exchange Commission 2006-2007 attendance exceeds 800 Branding through marketing efforts 12 Wall Street Journal announcements 6 Triangle, Triad, Charlotte Business Journal announcements 24 days of NPR Radio announcements 6,000 individuals in our database who receive emails and brochures about our activities ERM Initiative was featured story in the News & Observer – May 10, 2007

Internationally recognized through…. Outreach – Executive Education Bank Director Training for State Banking Commission Two sessions (September 06 and April 07) 70 participants (who serve on bank boards of directors) ERM Fundamentals Workshop – May 9th 57 business professionals attended

Internationally recognized through…. Outreach – Presentations International Speaking Istanbul, Turkey – 5,000 delegates from the world Ottawa, Canada – along with Controller General of Canada National Speaking – 6 conferences Including staff of Federal Reserve Across North Carolina – 7 conferences Including State Controllers office and 300 state agency heads Webinar Presentations 3 Webinars hosted by SAS Institute of Internal Auditors Compliance 360

Internationally recognized through…. Outreach – National Task Force Service COSO Board ERM Working Group for Government Results Center May 21 presentation to Federal agency leaders - DC The Conference Board – Research study adviser Committee of Chief Risk Officers Attended 2 CCRO meetings – seeking university involvement ERMII Board Member - Consortium of 12 universities around world

Internationally recognized through…. Internet www.erm.ncsu.edu 1st page Google search – “enterprise risk management” Random emails and calls thanking us for content ERM Resources – over 40 white papers, surveys, business press articles summarized, books, conceptual frameworks ERM in the News What’s Happening – faculty activities and accomplishments

Internationally recognized through…. Research ERM Initiative Faculty Fellows 7 papers under way 2 submitted to academic journals Journal of Banking and Finance Published or Forthcoming - 4 papers Research Awards Best Paper Award – Presented at ERM Symposium Chicago Beasley, Pagach, Warr

Internationally recognized through…. Research Research Grants GARP – study firm performance and ERM implementation IBM – study state of ERM for government sector AICPA – study state of ERM in non-financial services/insurance EEED – Develop executive education on ERM tailored for small to medium businesses

Internationally recognized through…. Research ERM Research Fellows 21 academics around country Speaker at Research Conferences/Seminars ERM Symposium Chicago University of Michigan Ohio State University of Wisconsin - Milwaukee

Internationally recognized through…. Curriculum 2 courses under development Overview of ERM Risk Measurement Tools – Anticipate offering Spring ‘08 Re-launch of Finance Risk Management Course Re-title of Global Strategies and Risk Management Course

Internationally recognized through…. Curriculum MAC Concentration Overview of ERM, plus one additional ERM course MBA Elective Not concentration at this point Encourage finance and supply chain concentrations – huge opportunities

Planned Activities for 2007-2008

Activities Still Centered Around 4 Pillars to Strategy Becoming internationally recognized thought leader Outreach Internet Research Curriculum

Outreach - ERM Initiative Advisory Board Internationally recognized through our… Outreach - ERM Initiative Advisory Board Next Advisory Board meeting – Friday, September 28, 2007 (Exploris Museum) Creating 3 subcommittees ERM Roundtables and Executive Education ERM Curriculum and Research ERM Web site Plan to add up to 10 more members as opportunities arise

Internationally recognized through…. Outreach – ERM Roundtables Six to be offered – 3 in Fall 07 and 3 in Spring 08 Fall 2007 Roundtable Dates Friday, September 28, 2007 Michael Raynor, author of The Strategy Paradox Presenting Sponsor: Deloitte Friday, November 2, 2007 Spencer Schwartz, MasterCard International Presenting Sponsor: Jefferson Wells Friday, December 7, 2007 Stephen Gross, Chief Actuary of the U.S. Social Security Administration

Internationally recognized through…. Outreach – Executive Education ERM Fundamentals Workshop – September 20th One-day workshop for business professionals Fee: $695 for early registrations Location: Exploris Museum Bank Director Training for State Banking Commission New offering – Merger & Acquisition Strategy: Creating and Preserving Value October 25 – 26, 2007 – Grandover Resort, Greensboro Participants restricted to bank directors Fee: $550 for early registrations

Internationally recognized through…. Outreach – Executive Education Strategic Risk Management – October 2007 Partnering with DePaul’s Center for Strategy, Execution, and Valuation One-day course on Managing Strategic Risk for business professionals to be offered in Chicago AON will be presenting sponsor Fee: $895 for early registrations AICPA Partnership for Audit Committee Training Partnering with AICPA to deliver ERM training for audit committees To be offered at the AICPA offices in New York February 2008

Internationally recognized through…. Internet www.erm.ncsu.edu Goal to keep site on 1st page Google search – “enterprise risk management” ERM Resources Continue to expand ERM Resources section of website Expand organizational infrastructure to help web site visitors navigate among our ERM Resources

Internationally recognized through…. Research Expand ERM Research Fellows Currently 21 academics around country Host ERM Research Conference February 2008 Submit research funding proposals in response to calls for ERM Research Complete research funded by IBM and AICPA Continue ERM Initiative Faculty Fellows program for COM faculty

Internationally recognized through…. Curriculum Support delivery of the MBA course Overview of ERM Over 30 registered for Fall 07 Secure launch of the Risk Measurement Tools course To be taught in Spring 08 Work with new finance hire to help re-launch of Finance Risk Management Course Scheduled launch Spring 08 Re-title of Global Strategies and Risk Management Course

To be internationally recognized as an ERM thought leader. Vision To be internationally recognized as an ERM thought leader. Mission To be a national and international thought leader in enterprise risk management (ERM) and in the implementation of ERM in strategy development and corporate governance.