Paul J. Sobel was approaching a crossroads in his longcareer when Georgia-PacificCorp came calling to ask him to serve as its chief auditexecutive. Sobel previously performed the same role at three otherpublic companies—two in the energy business and one inpublishing—and before that was a partner at the late accountingfirm Arthur Andersen, leaving just prior to its collapse. “I reallyknew very little about the paper, pulp and building productsindustry, but G-P put a great opportunity in front of me,” heexplains.

The opportunity was to develop a methodology for enterprise riskmanagement at the Atlanta-based manufacturer. Sobel is something ofan ERM pioneer. He first learned about this holistic process foridentifying, assessing and mitigating potential risk exposures inthe 1990s at Andersen, and in 2003, wrote one of the first books onthe subject from an auditor's perspective—“Auditor's Risk Management Guide: IntegratingAuditing and ERM.” Sobel also implemented ERM at Mirant Corp.and Aquila, his two previous employers.

“I've always tried to approach ERM in a more practical thantheoretical way, and writing the book helped me to demystify it andmake it a bit more contextual and understandable,” he says. “I nowthink I can apply it to most types of organizations, not just banksand energy companies.”

While he learned in his job interview that G-P, which isowned by Koch Industries, already had a sophisticated riskmanagement approach, his task was to ensure the ERM methodologyaligned with Koch's philosophy, developed and refined by itsco-owner, Chairman and CEO Charles Koch, over the past 40 years.Called MBM (for Market-Based Management), it involves a culturethat focuses on 10 specific attributes, such as integrity, humilityand challenging the status quo, in considering policies, practicesand conduct—“shared values that guide individual actions,” thecompany's Website explains.

“Koch really appreciates diversity of thought and challengingthe status quo in a respectful manner, which helped me in movingthe internal audit capabilities within G-P more broadly forward,”Sobel says.

Although he concedes that after only a yearand a half at Georgia-Pacific, he is still at the starting line inimplementing ERM, Sobel says its principles are already inspiringmanagers and employees to develop ideas for improving riskidentification and mitigation in their respective areas.

His work to date receives praise from Georgia-Pacific CFO TylerWoolson. “Paul brought a strong base of audit and risk managementknowledge to Georgia-Pacific, as well as the leadership experienceto move this knowledge from theory to practice, which will continueto benefit our organization over time,” Woolson says.

In the meantime, Sobel recently completed another book (withKurt Reding, a professor at Wichita State University), called“Enterprise Risk Management: Achieving and Sustaining Success.”Sobel says the book helps organizations validate and improve ERM byaligning their ongoing audit activities with ERM objectives. It'spublished by the Institute of Internal Auditors, on whose board heserves as senior vice chairman.

Although auditors typically are perceived as a humorless lot,Sobel isn't all business. When he worked in London for Andersen inthe 1980s, he began to enjoy English beers and ales, and startedcompiling a list of all the different brews he'd consumed. Thatlist is now 1,300 beers strong.

See Treasury & Risk's 2012 100 Most Influential Peoplein Finance list here.

See a slideshow of the risk management executives on thisyear's list here and complete coverage of the list here.