Fewer than 25% of executives report their organizations continuously monitor risk, according to a Deloitte and Forbes Insights survey, and more than a quarter (27%) said the risks posed by social media would be increasingly important.
“Social media wasn’t even on the radar a few years ago, and we’re now seeing it ranked among the top five sources of risk, on the same level as financial risk,” said Henry Ristuccia, partner, Deloitte & Touche LLP and co-leader of Deloitte’s Governance and Risk Management services. “The rise of social media is just another contributor to the volatile risk environment companies are being forced to navigate. The current marketplace seems to require that organizations be nimble in their risk assessment approach, whether it’s dealing with what employees post on social networks, or how they’re coping with regulatory changes or taking advantage of the opportunities rewarded risks can create.”
Despite advances in risk-related technologies, automation tools and tools for continuous risk monitoring are underutilized, with most monitoring done on a monthly, quarterly, biannual or annual basis.
“We believe technology has the potential to play a breakout role in the management of risk, but many companies are still behind the curve in this area,” said Mark Carey, partner, Deloitte & Touche LLP and leader of the U.S. Governance and Risk Strategies services for commercial and public sector industries. “It is encouraging, however, that more than half the respondents said their companies were planning to invest in continuous risk monitoring, and the tools that are available should not only help them with risk management overall, but also increase efficiency and decrease costs over time.”
• Risk management has become a C-suite issue, 26% said the responsibility for overall risk management belongs to the chief executive officer; 23% said chief financial officer or treasurer. Only 19% said chief risk officer.
• Dashboard reporting for senior stakeholders, data analysis and self-assessment remain a mixture of manual and automated processes; 28% said their companies were in the process of automating their risk reporting.
• Respondents said strategic risk and technology risk were areas where budgets will increase the most. Half expect minimal change to risk management budgets; fewer than 15% said risk budgets would decrease over the next three years.
According to the survey, 55% said their organizations will revamp their risk management approach within the next 12 months; 91% said they plan to reorganize their approach to risk management over the next three years.
Asked how they would reorganize, 52% said that they would elevate risk management’s profile; 39% would reorganize risk management processes; 37% said additional staff training; 31% would incorporate new technology; 28% would integrate risk into strategic planning.
The report is based on a survey of 192 U.S. executives from consumer and industrial products, life sciences, healthcare and technology/media/telecommunications industries conducted by Forbes Insights in association with Deloitte. The largest group of respondents (65) had titles of SVP/VP or director, and the second-largest group (49) consisted of CEOs, presidents and managing directors, followed by CFOs/treasurers and comptrollers (26). Their main functions were finance (93) and corporate management (81).