Excellence in Risk Management XII: Risk Management Continues to Advance But Could Be More Strategic
The 2015 Excellence report looks to understand the organizational characteristics that positively affect the execution of a risk management strategy.
Critical risk management functions continue to advance and their overall influence grow within organizations — a trend that is likely to continue given the complexity of the global business environment. But more can be done to improve the risk management department’s strategic effectiveness, according to the 12th annual Excellence in Risk Management Report.
The report, titled “Organizational Dynamics: A Focus for Effective Risk Management” highlights opportunities for organizations to help focus actions in key areas, including around organizational alignment and emerging risk issues. The report is based on an online survey conducted in February 2015.
- Risk management departments that do not report into finance are generally better aligned with other strategic functions within their organizations — most notably in the areas of enterprise risk management, compliance, information technology (IT) risk management, privacy, and security.
- Despite the importance placed on emerging risks by many board members, senior leaders, and risk executives, only 27% of survey respondents said that identifying emerging risks would be a priority in the coming year.
- Over the next two years, 42% of organizations expect to increase the level of investment in risk analytics, according to our survey, with 57% saying it would remain flat.
- Nearly 60% of respondents said their organization has no formal communications plan in anticipation of a cyber event.
- Risk professionals who report into the CFO or treasurer are much less likely to expect an increase in spending for training risk management staff in the coming year compared to those reporting elsewhere.
The report also offers a number of recommendations that may help organizations better align risk management practices across the enterprise.
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