Increasingly, more CEOs and CFOs are taking charge of their companies’ risk-management duties, according to a Deloitte & Touche and Forbes Insights survey—and the majority of those companies say they plan to implement changes designed to raise the profile of risk management throughout their organization.
According to the survey, 26 percent of respondents say the primary responsibility for overall risk management belongs to the CEO, followed by 23 percent who say the CFO or treasurer. The chief risk officer/head of risk came in third.
Deloitte teamed with Forbes Insights to poll 192 risk executives, mostly those holding the title of director or vice president, working for consumer and industrial products, life sciences, health care, technology, telecommunications and media companies in the U.S. that make from $1 billion to more than $10 billion in revenue.
Deloitte says it is essential to spread risk awareness throughout the entire organization so that all employees feel accountable, a task for which the CEO is well suited. “There is always a concern that if you set up a large [enterprise risk management] team, that [the team members alone] own risk. It can’t work that way. People who manage the day-to-day business need to own risk,” Rick Kulevich, senior director of ethics/compliance at business-technology provider CDW, says in the report.
As for raising the profile of risk management, 91 percent of the survey’s respondents say their companies plan to reorganize and reprioritize their approach to risk management in some form within the next three years, with 55 percent planning to implement changes over the next 12 months.
When asked how they plan to do that, 52 percent of those respondents say they intend to elevate the profile of risk management throughout their organization; 37 percent say they plan to provide additional training for staffers; and 31 percent say they plan to incorporate new technology.
Most of these changes are being driven by economic uncertainty: Almost 80 percent of survey respondents state that market volatility over the past three years has affected their approach to managing and responding to risk.
“When the financial world collapsed, it resulted in less tolerance for volatility and less tolerance for surprises,” Kulevich adds.
“Risk management being elevated to an executive level and being understood by an organization’s C-suite, board of directors and trustees is a win for our profession,” says Mike Liebowitz, director of risk management and insurance for New York University and a member of NU’s Risk Advisory Board. “We have been trying for an excess of decades to break into senior management boards to help them really understand what we do.”
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