Committee of Chief Risk Officers 8000 Research Forest Dr. info@ccro.org STE 115 #278 http://ccro.org The Woodlands, TX 77380 9 Advancing Our Energy Industry’s Risk &Compliance Best Practices Anderson: Benchmarking is my favorite, always. Number seven. There are some key risk indicators that we'd like to look at developing with the help of member data. This could be similar to the late and edited trades data that we're gathering and publishing as anonymous benchmarks. In LNG, we'd be asking participant members to first agree on what the needed KRI metrics are and then what information would they like to share to create them. …asking participant members to first agree on what the needed KRI metrics are and then what information would they like to share to create them. The CCRO’s role is to aggregate the contributed member data, and provide benchmarks that are anonymous, but provide a clear and otherwise unavailable insight into where you stand relative to your peers. Typically, CCRO benchmarks are used to drive internal change initiatives that will improve risk management practices. So, this should be very interesting for the group to investigate, and I hope you all will want to get involved in this asap. So that’s my overview. I want you guys to see that this working group, which is just coming together, has some exciting challenges ahead. Join us and be a part of the solution! 7) Benchmarking LNG Key Risk Indicators via Group Participant Data • What data might the CCRO collect to create useful LNG KRIs, for participants to benchmark themselves against? • Transaction counts? (market liquidity KRI) • Volumes by market? (concentration/liquidity KRI) • Volumes by product? (concentration/liquidity KRI) • …etc. • If data is too sensitive…how might similar info be disguised before submitted? • Eg. Submit each metric as a volume %of portfolio. Cannot be attributed to any participant that way…even without aggregation. • Proof of concept seen in CCRO late/edited trade benchmarks à • Proved impactful on internal practices www.ccro.org 9