Taking aim at value
Avoid overconfidence and look again at risk
A new survey conducted by Forbes Insights on behalf of Deloitte Touche Tohmatsu Limited finds an abundance of confidence among senior stakeholders regarding their organizations’ risk-related capabilities and actions. But a deeper look reveals significant need—and opportunity—to evolve risk strategies and responses.
Are senior stakeholders placing too much confidence in their organization’s risk management prowess?
About the report
Deloitte’s global survey report, 'Taking aim at value: Avoid overconfidence and look again at risk', examines C-suite and board perceptions of risk, their risk priorities, and how leading companies are evolving their approaches to risk.
The report discusses:
• Building closer alignment between value creation and risk
• Establishing and optimizing the role of the CRO
• Addressing strategic risks and opportunities
• Forging a response
CEOs and boards always have an eye on risk. But how do they perceive risk and what is their role in its effective oversight? Is risk management a means to avoid losses or a tool for creating value and optimizing outcomes? Is there a senior executive charged solelywith managing risk, like a CRO? Which risks are companies actively managing and which are lower on the priority list? In general, what are leading companies doing to evolve their approach to risk?
Three key observations from the research include:
- Companies need to build closer alignment between value creation and risk
Nearly nine out of 10 recognize that risk management should focus on value creation - not mere risk avoidance. But fewer than one in five are taking sufficient action in this regard.
- Companies need to do more to establish and optimize the role of the CRO
Nearly nine out of 10 of organizations say they have a full-time CRO or what they feel is its equivalent. But do they? Are they defining the role accurately? Are they promoting sufficient board interaction? Are they benefiting fully from this critical role? The research suggests otherwise.
- Companies must forge responses to their most strategic risks and opportunities
Companies say they are focusing on a wide array of both newly emerging and longstanding strategic and tactical risks. But are these the right issues? Are they understanding disruption, cybersecurity, or global political risks?