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 now mean that corporates and financial institutions should demonstrate better discipline, control and responsibility. Failure to keep on top of and comply with existing and emerging regulation could jeopardize reputations and livelihoods. How robust is your government, risk and compliance program?
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.
Companies 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.
With all these demands, internal audit is in many companies often 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.
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