October 10, 2001—Twice as many companies in a Deloitte & Touche survey believe risk management to be beneficial compared to two years ago.
Almost 70% of respondents in the Deloitte & Touche Financial Controllers Risk Management Survey 2001, conducted before the recent events in the US, perceived risk management as a valuable tool to gain competitive advantage, enhance business practices and positively change business. In 1999, the figure was 32%.
The number of companies rating themselves as risk-takers had also risen from 20% in 1999, to 35% this year. Almost 50% of the 60 financial controllers surveyed in FTSE 350 companies still prefer not to take risks however.
“Our research shows that many companies are embracing the spirit of Turnbull [last year’s report on the Combined Code of Corporate Governance], and understand the benefits of risk management, rather than treating it as a separate exercise undertaken to meet regulatory requirements,” said Malcolm McCaig, risk consulting partner at Deloitte & Touche.
“The challenge now for risk-takers is to ensure that the risk management skills of an organisation are in line with the increased appetite. Those companies that consider themselves risk averse should be aware that they are putting themselves at a competitive disadvantage.”
Risk management issues are also moving further up the hierarchy with chief executives ownership rising from 10% two years ago to 35% in 2001. The survey also showed that more than 50% of respondents have largely or completely separated risk management and business processes.
“Of these respondents their biggest challenge to integration of risk management is obtaining commitment. Lack of resource is also an issue for companies with a turnover of less than 250m,” said the consultancy.
—Jessica Jarlvi
Reprinted with permission; copyright 2001 i-FM
