Risk managers valued by executives but few have a place on the strategic planning team
Senior executives view risk management as a significant process for successful strategic planning, but the role may not be fully integrated into some businesses, according to a joint report by Marsh and the Risk and Insurance Management Society (RIMS).
The results of the Excellence in Risk Management 10th annual survey of more than 1,200 risk managers and C-suite executives were released this week at the RIMS 2013 Annual Conference and Exhibition.
It found that 52% of executives and 47% of risk professionals agreed that the top reason risk management is included in strategic planning is to identify and assess risks arising from the plan. But only 20% of executives and 15% of risk professionals said a risk manager was a full member of the strategic planning/execution team.
Furthermore, 80% of executives and 75% of risk professionals say they do not aggregate risks at the portfolio level, “demonstrating an immediate opportunity for risk managers to coordinate information into a portfolio view”, the report stated.
Commenting on the findings, RIMS director of the strategic and enterprise risk practice Carol Fox said: “This general move toward risk professionals adding more value to organisations’ strategic decisions is encouraging. Yet, there is still much room for growth, and gaps remain between what senior leaders and risk professionals expect from the risk function in its delivery of strategic value.”
The report also found that the top risks for 2013 reflect a shift in priorities among risk professionals and executives as political, regulatory, and environmental conditions changed over the past year.
C-Suite executives ranked business disruption as the biggest risk for 2013, while risk managers cited economic conditions as their top risk.
By contrast, executives and risk professionals ranked economic conditions and legal or regulatory shifts as their top risk in 2012.
Threats to data security and privacy breaches ranked 12th place for risk professionals and number 26 for executives, while exposure to technology and systems failures ranked number 16 and number 18 respectively.
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