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Businesses need to link risk and operational objectives
Risk management is an issue that needs collaboration from every corner of the business. So, how is this effort progressing?
Risk is an important factor to weigh into business decisions.
To be a profitable and successful business in today's environment, enterprises must analyse every risk that they face and develop mitigation strategies to fund business objectives. However, as the global risk landscape continues to shift, these efforts become harder to achieve, as outlined in a recent Ernst & Young (EY) report.
97 per cent of organisations had made progress in tying risk management with business objectives.
For its global "There's no reward without risk" study, close to 1,200 C-suite leaders, board audit committees, and assurance and compliance executives were surveyed across 63 countries, including 214 from the Asia Pacific region.
According to the respondents, 97 per cent of organisations had made positive progress in tying risk management with business objectives. Unfortunately, just 15 per cent had actually created closer links as a result.
EY's Global Risk Leader Paul van Kessel said this was concerning given the fact that businesses face many ever-changing risks including market volatility, cyber threats and geopolitical crises.
"While this creates many challenges for organisations, it is important to think, manage and respond to risk differently: find where there's opportunity in risk and protect against the risk you would like to avoid," he said in a September 24 media statement.
"With the knowledge that risks are a never-ending challenge and new risks will be encountered every day, a stepped approach to risk management is required in order to build a risk-aware organisation."
Regular reviews essential
EY suggested one of the reasons why it is such a struggle to align risk management and business objectives is due to a lack of communication among departments. While 88 per cent of the respondents said board members understand what risk management activities are occurring, a significant 77 per cent of board members or respondents only examine this risk once a year.
By combining the board's insight with regular risk profile reviews, businesses can be in a better position to grow and expand in this difficult economic climate.
Cybercrime hitting the headlines again
If there is one risk that every business needs to look at in detail, it is cybercrime. As hackers evolve their efforts, there is no enterprise that is.
This was underpinned in a recent report from FireEye. According to results, around 33 per cent of businesses in the Asia Pacific region encountered attacks during the first half of 2015.
In fact, cyberattacks in Australia grew 30 per cent compared to previous report figures.
Risk management recruitment is an important part of this issue, and this is where Ethos can be of assistance.
Ethos Corporation is an Australian owned Executive Recruitment Consultancy specialising in the $120k - $400k candidate market.
By Matthew Quinn