Nexia Global Risk Management Report
This report is based on a survey completed by client companies of firms in 23 countries, who are members of Nexia International. Participants provided information on their current risk management practices and their readiness in addressing and mitigating risks to their businesses. The report also draws on the results of a concurrent survey completed by Nexia member firms in 27 countries.This report provides an assessment of the business risk management landscape around the world, an up-to-date snapshot of key issues facing the global business community and insights into current best practices.
Awareness of risk management is clearly on the increase. Almost half of client companies indicated that they expect investment in risk management to increase in the coming year, while a further 48% expect their spending on risk management to remain at the same level.
This is supported by the views of Nexia member firms – 63% believe that the level of risk management services they provide will increase further in the year ahead.
Overview of survey findings:
- 51% of the Nexia member firms surveyed believe that the risk profile in their country
- Compliance was ranked as the number one risk facing their businesses by more respondents than any other.
- Two-thirds (67%) of the companies responding to the survey reported that their businesses have a formal risk assessment process based on probability of occurrence and severity of impact - However, one-third (33%) of companies reported room for improvement in their formal risk management processes.
- 43% say their use of IT to mitigate risks is only “partially effective” at best.
- Over half (57%) of companies don’t yet have a formal risk management training programme in place.
- 38% say risk tolerances are only reviewed annually or less frequently.
- Nearly three-quarters (74%) of companies surveyed rated the involvement of their boards of directors, audit committees, partners or owners in discussions regarding risk management as effective or very effective. Nearly two-thirds (64%) of companies reported having designated a senior management executive to be the owner of the risk management process. Where clients had a risk management process owner, 30% said that the person’s role, responsibilities and authority were very well defined.
Conclusion of they survey:
Awareness of risk management is clearly on the increase. In terms of how prepared they were in addressing risks, the companies in the survey indicated that they are least prepared in dealing with social media, succession planning and natural or man-made disasters.
A useful checklist of questions arising from the survey, which companies may wishto consider using to benchmark their current risk management practices, is includedat the end of this report. Interested? Download the survey for free: