Informed Decision Making

Transcription

1 Informed Decision Making WHEFA Workshop March 2018 Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.

2 Choose Your Own Adventure 2

3 Choose Your Own Adventure 3

4 Destination The Desired Outcome 4

5 How Decisions are Made Habit / Intuition Emotion Informed 5

6 Habit and Intuition-Based Decisions 6

7 Emotional-Based Decisions 7

8 Informed Decisions 8

9 The Path Forward 9

10 Informed Decision Making Proper balance of risk and reward by establishing a common appetite for risk acceptance across communities, control functions, risk oversight functions, senior leadership, and the Board Risk Reward Identified Risks Variability of outcomes Managed Risk Reduces variation in outcomes of strategic activities Mitigation Controls Effectiveness 10

11 Informed Decision Making Objectives Balances risk and reward Establishing a common appetite for risk acceptance, control functions, risk oversight functions, senior leadership, and the Board Reduces variation in outcomes Increases alignment with strategic initiatives Allows the organization to focus on the core set of practices and resources needed rather than organizational silos / individual agendas Focuses management attention on what needs to be done rather than on who reports on it or where it occurs 11

12 Decision-Making Based on Information Imagine / Dream Mission, Vision & Values Strategy Execution 12

13 A Structured Assessment Framework Identification of Risk and Reward Focused on the inherent risk associated with the activities of an activity Develop an understanding of the opportunity and risks from management s viewpoint Integrate previous assessment information with information provided by industry experts to build a detailed list Created an enterprise-level profile Assessment Criteria Assessment of Risk and Reward Conduct interviews with key executives and leverage historical information to identify and understand potential outcomes Measure inherent risk without considering current mitigation activities Conduct session with leaders to validate and prioritize risks Understand the most likely outcomes Management of Risk Build action plan and assign owner for each high-risk area Identify key metrics/measures and monitor risk exposures Fluctuation above and below tolerance are reported and actions considered and formally reported Risk management activities are considered within the performance measurement and management processes Implementation of risk mitigation strategies 13

14 Case Study 1 Mixed-Use Development Source: Ancillary Services Presentation 14

15 Case Study 1 Mixed-Use Development Senior Housing Student Housing Retail Freestandin g ER Fitness Potential Reward Inherent Risk Identification Mitigation Factors Residual Risk Assessment of Reward / Risk - Does the Reward Exceed the Risk? Hint Practical Considerations: Site selection Developer selection Own vs Lease Ownership options Ownership advantages Leasing advantages 15

16 Case Study 2 Advance Refunding Source: Market Updates Post Tax Reform Presentation 16

17 Case Study 2 Advance Refunding Current Refunding Taxable Advance Refunding Negotiate with Bondholder Cinderella Bonds Forward Delivery Bonds Forward Starting Swaps Potential Reward Inherent Risk Identification Mitigation Factors Residual Risk Assessment of Reward / Risk - Does the Reward Exceed the Risk? 17

18 Case Study 3 Sale of Bond Financed Property Source: Post-Issuance Tax Compliance Presentation 18

19 Case Study 3 Sale of Bond Financed Property Potential Reward Inherent Risk Identification Mitigation Factors Residual Risk Assessment of Reward / Risk - Does the Reward Exceed the Risk? Defeasance of the Bonds Purchase of New Property 19

20 Speaker Information For more than 20 years, Michael has assisted hospital systems, senior living, home health, and hospice providers develop and execute strategic initiatives and mitigate risk. Michael has worked in a professional services role, as well as within a national health care provider s internal audit and compliance departments. He is an experienced speaker and author. Michael Peer, Principal michael.peer@claconnect.com CLAconnect.com linkedin.com/company/ cliftonlarsonallen facebook.com/ cliftonlarsonallen twitter.com/claconnect 20