According to multiple surveys conducted by industry experts, less than 10% of North American firms have used an integrated approach to risk management. The same study indicated that Risk Manager positions were steadily increasing. Another survey showed that the insurance sector is the only industry that has seen a rise in the development of risk management policies.
How many US companies have implemented risk management policies?
The below information provides a little more insight as to the number of companies that have integrated risk management policies.
- 14% of all US companies have not adopted a risk management policy
- 7% say that their organization implemented their company’s risk management several years ago and its implementation is complete
- 7% of companies state that their company recently adopted a risk management team and its application is relatively complete
- 15% say that their business recently adopted risk management policies but its implementation is not fully completed
- 22% declare that his or her organization is engaged in the process of implementing enterprise risk management
- 32% say their business is currently assessing the relevance of risk management for their business
- 3% state that company owners rejected the concept of enterprise risk management
Why haven’t all companies adopted risk management teams?
One primary reason behind a business not tackling risk management? External pressures, including institutional investors. In particular, pension funds encourage corporate governments to adopt an integrated approach to risk management.
In the US, for example, the American Stock Exchange strongly recommends that every business has this strategy in place. In Australia and New Zealand, a set of standards common to risk management is put in place but, for the moment, there is no obligation. To learn more, contact David Johnson Cane Bay today.
In Germany, risk management legislation was passed in 1998. These laws and reports argue for the adoption of integrated risk management. In Canada, the government issued a director’s guide that emphatically states that risk management is part of the governance process and, as such, requires that risks be appropriately managed. In the United States, the Securities and Exchange Commission, make risk management a priority for companies. It may, however, be regretted that the application of these reports is not compulsory.