Oxford Economics worked closely with PricewaterhouseCoopers LLP for the fourth consecutive year to produce its annual report on the latest thinking about risk management issues among C-level executives worldwide.
The report was based on a survey of 1,229 risk officers, corporate board members, CEOs, CFOs, chief auditors, and others from the C-suite in 34 countries, as well as one-on-one interviews with a select group of executives.
The findings were dramatic. While 73% of survey respondents agree that risk to their organizations are increasing—with regulatory complexity, data security/privacy, and cost pressures leading the risk list—companies are not, by and large, responding to this environment with improved risk management programs. This despite the fact that risk management leadership demonstrably leads to stronger performance and profit growth.
Only 12% of those surveyed have put in place the processes and structures to make them true risk leaders. But the payoff for those efforts has been enormous. More than half of risk leaders recorded increased profit margins over the past three years (55%, compared with 43% of non-leaders). In addition, 41% of leaders were likely to have achieved an annual profit margin of more than 10% over the past three years, compared with 31% of non-leaders.
The report concludes with five recommendations based on best practices to improve risk management programs.
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