Risk management is not the responsibility of a single department — it is the responsibility of everyone, from the chief executive down. Past corporate failings have been attributed to lack of accountability, strategy, and transparency.
Tougher expectations by regulators and other stakeholders are driving organizations to demonstrate better discipline, control, and responsibility. Failure to keep on top of and comply with existing and emerging regulations could jeopardize reputations and livelihoods.
Financial risks have probably never been more acute. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk.
Organizations should also be vigilant about risks presented by suppliers. A counterparty who defaults on a contract, or whose business collapses, can have serious financial and reputational ramifications for connected parties.
Fraud risks can also increase when cash is tight. Some employees become more opportunistic — and external hackers more resourceful. They find security lax in areas of the business that used to be better resourced … and they strike. Are your systems and policies sufficiently robust to ward off the risk of fraud?
At the same time, organizations may be more likely to pursue litigation for losses that they would otherwise endure in the past. Disputes can arise as they seek to apportion blame to other parties for inappropriate or negligent behavior that results in financial or business loss. Could you end up as instigator or defendant in a litigation case?
In response to these demands, internal audit may be elevated from pure compliance to a function that regularly reviews the risk profile for emerging risks and identifies trends as it keep its finger on the pulse of business performance. The Chief Risk Officer, meanwhile, becomes increasingly involved in strategic decision-making where the emphasis is as much on risk as it is on growth.
Fortify your business. Our Risk Consulting professionals offer insights and experience that can help our clients stay on track and deal with risks that could affect their business survival.