Reimagine risk: Thrive in your evolving ecosystem has been saved
Reimagine risk: Thrive in your evolving ecosystem
Deloitte’s 2019 survey of risk management
An overwhelming majority of executives now acknowledge risk management’s strategic importance. The task now before risk management functions—and CROs—is to rise to the challenge by equipping themselves to provide business-focused insight.
In environments of change, professionals in a range of endeavors often fail to understand risks and their roles in managing them. Consider these examples:
- During the first tests of nuclear weapons in the Mojave Desert, observers of the bomb blasts, unaware of the dangers of radiation, wore sunglasses and lab coats as protective gear.
- When scientists first discovered that diseases were transmitted through microscopic organisms and that these “germs” could be controlled through handwashing, many physicians refused to believe it—as healers, they could barely accept the idea that they were infecting their patients.
- After automobiles attained lethal speeds, decades passed before widespread adoption of seat belts and children’s car seats, because it took that long to compile, analyze, and disseminate the data on causes of driver and passenger fatalities.
In organizations, a lack of awareness of risks, of people’s roles in controlling them, and of ways to use risk data and new technologies and tools increases the challenges of risk management and undermines the achievement of strategic goals. Most organizations understand this: More than 90 percent of the risk managers we surveyed expect risk management to become more important to achieving strategic goals in the next five years.
Since the financial crisis, many organizations have—to varying degrees—upgraded and restructured their risk management functions. Yet much work remains undone. To understand the progress made—and still to be made—Deloitte surveyed 100 executives with the title of chief risk officer (CRO) or equivalent, 100 C-suite executives not primarily responsible for risk, and 300 executives in risk-related functions such as IT and operational risk. This sample was drawn from US companies with at least US$500 million in annual sales in a cross-section of industries. Survey questions aimed to illuminate executives’ views of risk management, current practices, organization of risk functions, key activities and capabilities, applications of technology, and opportunities to add greater value.