Marsh, RIMS Issue Risk Management Report

Findings from a new report jointly published by Marsh and RIMS, the risk management society, highlight opportunities for senior executives to facilitate better organizational alignment of their risk management departments and for risk professionals to help the company focus discussions regarding emerging risk issues.

In a release, Marsh noted that the 12th annual Excellence in Risk Management survey finds that overall, critical risk management functions continue to advance and their overall influence grow within organizations -- a trend that is likely to continue given the complexity of the global business environment. More can be done, however, to improve the risk management department's strategic effectiveness.

For the first time, the Excellence survey sought to better understand how organizational alignment affects the execution of a risk management strategy. The Company said hat among the findings, the survey revealed that risk management departments that do not report into finance are generally better aligned with other strategic functions within their organizations -- most notably in the areas of enterprise risk management, compliance, IT risk management, privacy, and security.

Additionally, 27 percent of the risk professionals who report into the CFO or treasurer said they expect an increase in spending for training risk management staff, whereas 46 percent -- nearly double -- of those reporting elsewhere expect an increase.

"Finance executives certainly have an opportunity to facilitate greater organizational connections for the risk management departments that report to them in order to position them for broader impact across the enterprise," said Brian Elowe, a managing director at Marsh, and co-author of the report.

Opportunities also exist for risk management when it comes to emerging risks. According to the survey, only 27 percent of risk professionals said that identifying emerging risks would be a priority in the coming year, which is counter to the message being heard from many boards that are concerned with "what's around the corner."

Furthermore, when asked how companies view the potential impact from some of the top global risks as discussed in this year's World Economic Forum Global Risks 2015 report, the majority of risk professionals categorized state collapse, climate change, and water crisis as risks that are not of immediate concern, with many saying they would never impact their organizations. This is despite all three ranking highly in this year's Global Risks report in terms of their likeliness to happen and their potential impact over the next 10 years.

"These findings certainly suggest that more can be done to elevate discussions around emerging risk issues within organizations, with an eye toward potential long-term operational and/or financial consequences," said Carol Fox, director of the strategic and enterprise risk practice at RIMS, and a co-author of the report. "The good news is senior leadership more than ever is relying on risk management to provide strategic input around business strategy, so there is a real opportunity for risk professionals to lead discussions in this area."

The Excellence in Risk Management XII survey is based on more than 300 responses to an online survey and a series of focus groups with leading risk executives in February 2015.

Marsh is a provider of insurance broking and risk management. management

RIMS, the risk management society, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world.

More information:

www.marsh.com

www.rims.org

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