Corporate leadership attention to risk management has significantly increased as a result of the global downturn and the many high-profile risk management failures in the financial services industry, according to the results of a new Korn/Ferry Executive Quiz. From a July 2010 survey of senior executives and board members from across the globe, it was clear that companies are actively identifying and addressing their own risk management issues more than ever before.
According to the Korn/Ferry executive survey, 59 percent of executives believe that the recent scrutiny on corporate reputation risk has had a positive affect on their Board’s view of reputation management and crisis preparedness, with only 28 percent saying that the increased attention on risk management has had no affect.
“The fragile global economy and the recent high-profile collapses within the financial sector have taken their toll on organizations worldwide,” says Steve Mader, vice chairman and managing director of Korn/Ferry Board Services. “As a result, it’s clear that a by-product of the new environment is an increased focus and awareness by executives of the importance of risk management planning. The Korn/Ferry survey shows that the majority of companies have already taken practical steps to enhance their risk management practices and awareness.”
More than half of the executives (58 percent) believe that their company has improved the quality and timeliness of internal oversight and reporting to the Board to better assist in risk management and planning.
Fifty-seven percent of senior executives surveyed said that directors and executives are spending more time dealing with risk management. Twenty-six percent said there had been no change at all, while 14 percent revealed that their company is actually spending less time on risk management. Results also showed that the majority of executives, 60 percent of those surveyed, do not believe that increased government oversight had been a driver for improving risk management at their organizations.
The survey indicates that risk analysis and ongoing management are becoming increasingly critical areas of focus and importance to organizations and C-suite executives across the world. While 20 percent of organizations have a chief risk officer from among the executives surveyed, many noted that the direct responsibility for risk management at their organizations starts at the top: 43 percent identified the chief executive officer as directly responsible, with 19 percent pointing to the chief operating officer.