Nearly half of companies rate themselves 'not very effective,' not using risk management best practices
Large U.S. companies have improved their ability to identify and manage potentially critical business risks, according to the 2007 U.S. Risk Barometer study released today by Protiviti Inc. However, there is still substantial room for improvement, the Protiviti report shows. Nearly half of executives rated their organizations less than "very effective" at identifying and managing significant risks, leaving them vulnerable to unanticipated losses, reduced productivity and business disruptions. A copy of the Risk Barometer report is available at http://www.protiviti.com/go/usriskbarometer2007.
"With all the attention today on GRC [governance, risk management and compliance], the results of the Risk Barometer can provide companies with insight about how their risk capabilities and appetites stand compared to the Fortune 1000 and 2000 companies in Protiviti's study," said Everett Gibbs, managing director and chairman of Protiviti's operating committee. "The good news is that 53 percent of companies surveyed perceive themselves to be 'very effective' at managing risk. The not-so-good news is that 47 percent of large companies, by their own admission, are still below par in managing their risks. This should be a wake-up call to senior management, the board and investors."
"There has been a 15 percent increase in the percentage of companies managing risk very effectively since our 2006 U.S. Risk Barometer, yet a high percentage of companies have significant room for improvement to protect and enhance enterprise value," added Gibbs.
The Top Risks Keeping Executives Awake at Night
The 2007 U.S. Risk Barometer study, which surveyed 150 senior-level executives (half of whom were CEOs or CFOs) divided equally between Fortune 1000 and Fortune 2000 companies, found that competitor risk is viewed as the top risk to these organizations. Additionally, customer satisfaction, the regulatory environment, information systems and IT security, and changing markets make up the first five of the top ten risks as determined by the study.