With the continuing impacts of the pandemic, social unrest, geopolitical shakeups, cyber threats and other never-ending uncertainties, are organizations prepared to manage the risks and disruptions facing them, or are they in danger of being overwhelmed? A new report assesses the current risk landscape.
The 2021 Global State of Enterprise Risk Oversight, published by North Carolina State University’s Poole College of Management and the Association of Certified Professional Accountants, surveyed 718 executives worldwide for insights on the current state of risk oversight. The responses revealed five overarching themes.
- COVID-19 has dramatically interrupted strategic decisions: Organizations outside the U.S. – particularly Africa and the Middle East – have been particularly impacted, and the volume and complexity of these risks means the need for risk management isn’t going away
- Risk management practices may not be keeping pace with the current realities: The majority of respondents don’t see their ERM processes as mature or robust (only about a third of organizations say they have complete ERM processes in place)
- Changes to risk management processes may be on the way: Calls for increased risk oversight are equally strong between boards and CEOs/Presidents, even without outside regulator pressure
- Now is the time for organizations to strengthen their risk insights into their strategic decision-making: Currently these are viewed as separate activities, particularly in the U.S. and the UK/Europe, and
- Organizational culture may be limiting progress toward more value-added risk management: Among them, less than a third of organizations have provided formal training/guidance on RM.
As a result, the report offers these key considerations for executives when evaluating their preparedness in the face of a rapidly evolving risk landscape:
- How prepared was your organization to navigate the pandemic?
- To what extent have your operations and strategic plans been permanently altered to a “new normal”?
- Is the emergence of risks affecting the pace at which your business grows?
- What new RM processes were implemented during the pandemic, and how robustly were they monitored?
- Who in your management team champions risk management for your organization?
For more in-depth analysis, click here to read the complete report.
DRI offers Risk Management Continuity courses throughout the year, providing the tools to recognize threats to your organization and how to protect against them. It will give you the tools to perform risk assessments, reduce organizational vulnerabilities, select cost effective risk controls, and obtain buy in from upper management. Click here for more information.