A recent report by Ernst & Young finds that an overwhelming number of executives feel that their risk management program could use improvement. "The Future of Risk: Protecting and Enabling Performance" found that 96% of respondents said that their risk management could be improved. And apparently, these executives also plan to do something about it-with only 1% of participants saying they plan to reduce risk management resources next year.
The survey also found that 73% said they have seven or more risk functions, 67% reported overlapping coverage with two or more risk functions and 50% reported gaps in coverage between risk functions. The study suggests companies update their risk management strategies by focusing on improving risk assessment, aligning risk management strategies with business objectives and coordinating risk functions.
"Departments tend to assess how risk affects them, not the entire organization," said Ernst & Young partner Tanya Khan. "Risk management needs to move out of its silo, and reach across an entire organization if it's going to work well. Companies need to ask, 'Do our efforts allow us to understand what big-picture risks might emerge 12 months from now?'"