Once ignored in favor of moves perceived to spur growth, risk managers are being counted on more now to assist companies following the financial crisis.
However, the authority risk managers are currently enjoying may be sidestepped once again when the economy strengthens and profits are plenty.
According to the findings of the latest Economist Intelligence Unit (EIU) report into risk management in business, sponsored by the ACE Group, senior executives have recognized the importance of strategic risk management and have given chief risk officers more power, but only 35 percent of them said their company effectively anticipates and measures risks.
Furthermore, while about 50 percent of respondents said risk management will play a larger role than a year ago, about the same amount said the authority of risk managers will decline when “the good times return.”
“Since the start of the global recession, the risk manager's voice has begun to be heard within many organizations and there has been a growing understanding of the value risk managers can add to business strategy discussion,” said Andrew Kendrick, chairman and chief executive officer of ACE European Group, in a statement.
“But the profession now stands at a crossroads,” he added. “If it allows itself to be side-lined into the purely technical aspects of risk management and fails to take the steps necessary to engage colleagues and build a risk culture within their business, it will lose its relevance as better economic times return.”
Asked about the most important objectives of risk management, 58 percent said identifying new and emerging risks. Just over 40 percent said that within the next year they expect risk managers to make the most meaningful impact in conforming to regulatory requirements.
The survey revealed that 46 percent think their companies are effective at linking risk management to the overall corporate strategy.
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