Faced with a volatile and changing risk environment, 91% of executives responding to a survey say they plan to reorganize and reprioritize their organization's approach to risk management within the next three years.
According to the report released Thursday by New York-based Deloitte & Touche L.L.P. and Forbes Insights, the strategic research practice of Forbes Media L.L.C., executives recognize the importance of continuously monitoring exposures, but less than 25% of those surveyed said most risks are monitored continuously in their companies.
Among ways companies said they plan to reorganize and/or reprioritize risk management over the next three years, 52% indicated they plan to elevate risk management's profile throughout the organization, while 39% said they plan to reorganize risk management processes.
Among the other reorganization and reprioritization plans among the top five responses in the survey, 37% of executives cited providing additional staff training, 31% said they plan to incorporate new technology, and 28% said they plan to integrate risk management into their organization's strategic planning.
Most executives—77%—said their organizations employ a centralized approach to risk management.
Asked about the biggest challenges to effectively managing risk, 28% of the executives surveyed said “people being unaware of what they need to do concerning risk,” 27% cited cost and budgetary constraints, 26% cited incentives that don't reward risk-based decision-making, 23% cited inadequate information with which to make risk-based decisions, and 22% mentioned the lack of clarity of risk roles in the organization.
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Executives placed social media risks on par with financial risks among the most important risk sources over the next three years, each cited by 27%. Global economic risk was the top risk identified by 41% of those surveyed, followed by government spending/budget by 32% and regulatory changes by 30%.
The Deloitte/Forbes Insights survey gathered information this spring from 192 U.S. executives at companies in the consumer and industrial products, life sciences, health care and technology/media/telecommunications industries.