A recent report on enterprise risk management finds business leaders feeling risk complexities are increasing, and finding difficulty integrating enterprise risk management (ERM) with strategic decision making, among other responses.
The 5th edition of this report from North Carolina State University, the Association of International Certified Professional Accountants (AICPA), and the Chartered Institute of Management Accountants (CIMA), highlights the evolving status of risk management (RM), based on responses from 747 executives around the world. Among the top takeaways:
- Increasingly complex risks – Respondents say the volume and complexity of risks is increasing around the world, and as a result, many organizations are experiencing unexpected surprises; of respondents, Asia and Australasia are most likely to have ERM in place.
- The struggle to integrate risk management and strategic decision-making – Fewer than half believe their RM process actually provides strategic advantages, especially in Europe and the US.
- Limits of organizational culture – Fewer than a third of organizations surveyed had provided formal training/guidance on risk management, creating barriers that limit efforts to enhance RM processes.
- Needs for advanced oversight – Calls for enhanced risk oversight, including robust ongoing reports, are strong between boards and CEOs/Presidents, even without strong outside pressures.
- Keeping pace with emerging risks – Fewer than half of organizations maintain risk inventories at an enterprise level; about half of organizations outside Europe have appointed a senior executive to lead the risk management process (compared to just over a third of organizations in the UK/Europe).
Click here to read the complete report.