In short, ENR companies face an ever-growing array of risks. But in a worldwide survey of senior executives in the industry,1 we found that the management of these risks was not advancing as fast as the threats facing these companies. Today’s complex business environment requires an even stronger ability than before to master risk management, but companies are falling short in important areas.
“ENR companies face an inflection point in their risk management efforts,” says Michael Wilson, Partner, KPMG in the UK. Large oil and gas companies in particular were early adopters of enterprise risk management, but in the past few years progress has stalled, as many have been using nearly the same process they first implemented. Companies need to return to basics and reconsider what the expectations are of their programs if they are to take risk management to the next level.
1The survey of executives was conducted by the Economist Intelligence Unit in December 2012, as part of a research program covering a wide range of sectors. A total of 1,092 C-level executives responded to the questionnaire, of which 156 were employed in the ENR industry. Thirty-nine percent of ENR executives were in North America, 23 percent in Asia-Pacific and 16 percent in Europe. The remaining 22 percent were in Latin America, Middle East and Africa. All were C-level executives in various functions, including Risk, Compliance, Finance and General Management.