Despite a widening range of risks faced by organizations globally, less than 35% of companies say they have an enterprise risk management (ERM) plan in place. What’s more, 70% would not describe their oversight as mature, according to the Chartered Global Management Accountant (CGMA) report Global State of Enterprise Risk Oversight 2nd Edition.
The study found that 60% of boards of directors globally are pressuring their companies to increase involvement of senior management. The U.S. is lagging in some areas, with only 46% of its boards assigning risk oversight responsibilities to a committee compared to 70% globally.
One survey conclusion:
Unfortunately, many executives view risk management as mostly focused on compliance and loss prevention with little connection to strategy and value creation. As organizations evaluate their risk management processes, they may benefit from providing an honest assessment about the extent to which risk management in their organization is an important input to the strategic planning process. Given executives understand the importance of taking risks to generate returns, shouldn’t risk management be an important strategic tool by providing risk insights that inform strategy?
Other key findings of the study include: