Insurance Insight :: Harvard/Zurich survey findings – “who’s kidding who?”


English: Risk Management road sign

Image via Wikipedia

Who ever said risk was optional!!? To read, even this brief extract, one could be forgiven for thinking that a “risk culture”, in some way, sits apart from the, wider, Corporate culture!

NO!!!

Business Executives scratching their heads and wondering why the culture hasn’t changed just isn’t credible. I’ll wager, if the culture was one of increasing efficiency and profitability they would know exactly where the credit and “financial recognition” should go.

Governance, Risk & Compliance failures can/do occur for a variety of reasons but very few CxO’s are prepared to acknowledge or admit that it is because they run contrary to a flawed (unseen) Corporate culture…if this were NOT the case, any Executive who presumed to view themselves as a “leader”, would ensure that appropriate KPI’s were embedded in the business processes that facilitate the effective flow of information – that, themselves, can be a source of risk.

Another common “mistake” is to assume that the Risk Management process itself is adequate. Patently, according to at least one recent report, this is no longer the case: Roads to Ruin

The complexity of modern business has, not only, outstripped the capabilities of conventional risk management but has, also, rendered much of the data upon which risk rating is based, at best, dangerously misleading. If insurers don’t understand (and learn from) the difference between risk and uncertainty then they should not be able to trade!

While global companies are intensifying their focus on enterprise-wide risk management, most corporate leaders believe their companies have a long way to go in building an effective, risk-aware culture. This is the finding of a survey by the Zurich Financial Services Group, in collaboration with Harvard Business Review Analytic Services, Risk Management in a Time of Global Uncertainty. Over two-thirds of 1419 business executives surveyed said the topic of risk management has increased in importance over the past three years. Yet, only one in ten said its executive management is “highly effective” in creating a strong risk-management culture.

via More proactive risk management is needed survey finds – Insurance Insight.

“we have to avoid using yesterday’s solutions to address today’s risks”

Enterprise Risk Management v Complexity Management

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