By Craig Farris, Accenture
In the aftermath of the financial crisis, companies are waking up to a world of new market realities. Adaptive approaches, sharpened competitive instincts, and the power of enterprise risk management are now necessary for success.
According to a recent Accenture survey, executives expect risk management to have a major impact on sustainable profitability (61%) and competitive advantage (53%). Yet, less than a third indicated they believe their company is effective at managing their risks.
Dissatisfaction with a company’s risk management strategy is due to one or more of the following factors:
- The company finds itself stuck in a risk assessment mold
- Risk management is viewed as an “extra” activity
- The company’s leadership is not sure how to make use of risk management
- Reporting systems do not produce the right information
- Risk management leadership does not have a clear view of the value of this capability
There are clear steps a company can take to move forward:
- Break out of the value fog – define the value expected from enterprise risk management, holding the program accountable for meeting set goals
- Establish clear risk governance structures to see how decision-making flows and supports a systematic view of risk
- Support the company’s risk efforts with timely, insightful reports and information flow
- Ensure the firm has the right analytics in place to gain a comprehensive understanding of risk and how to leverage it for business advantage
- Be bold, seize risk management’s potential for adding value to the business.
For companies determined to succeed, enterprise risk management is the tool that takes them down the road towards enhancing the value of their business. A tepid approach to enterprise risk management will concede the future to those who take the bold initiative.
Craig Faris is executive director – Risk Management, Retail and Public Service areas for Accenture Risk Management. Based in Washington D.C., he has over 25 years of global, corporate and consultancy experience in the retail, consumer products and energy sectors. See more at Accenture 2009 Global Risk Management Survey
