In this year’s PwC Risk in Review survey of 1,229 senior executives and board members, 3 out of 4 respondents state that their companies are largely ill-prepared to face the growing risks facing their companies.
“Market uncertainties and technological progress increased the speed of the decision process in most companies. In the same time, additional pressure is driven by business partners and regulators which are asking for more business data to be supplied in order for them to mitigate individual or systemic risks. Managers have however finite resources. We need to focus on those risks we are able to control. And the risk management process needs to be efficient, because it gives competitive advantage, or to the contrary – a disadvantage if it is not efficient”, stated Mircea Bozga, Partner, Assurance Services, PwC Romania.
“The Romanian business environment adds also its own flavour, driven by the current stage of economic development: for example frequent legislative changes, conflicting interpretations of the laws, limited availability of accessible financing, underdeveloped infrastructure and others – we all talk about them. And these risks come on top of the market uncertainties or technology driven risks. However, many companies are still working to develop an integrated risk analysis”, added Mircea Bozga.
Taking into consideration the speed of the decision making process, driven by technology and interdependent functions, the integrated risk analysis offers significant advantages.
But, as the PwC survey shows, companies are not content with their current risk management strategies and programs. As such, less than a third of respondents stated that their risk management strategies are integrated in the planning and budgeting activity. And less than 15% stated that they have risk management procedures aligned with the general management strategy.
„Risk management leaders understand how today’s multiplicity of business risks interconnect. They create resilient risk management strategies that allow them to move faster in the digital age. Their risk management programs are highly aligned with their business units, and they clearly communicate their appetite and tolerance for risk across the business. They’re better able to manage and monitor potential vulnerabilities from third parties. They’re able to take greater business risks, bringing an informed perspective to decision-making that steers them past threats and helps identify strategic opportunities to move forward in the face of uncertainties rather than inhibiting performance, these leading companies’ focus on proactive risk management actually helps them build a stronger bottom line”, stated Alina Sima, Manager, Risk Assurance Services, PwC Romania.
Among the risk management leaders in the PwC survey, two thirds (67%) reported that they are likely to proactively involve risk analysis in the decision-making process even when a strategic decision is needed quickly. Rather than slowing things down, the active involvement of risk management is an aggregate time-saver on the front end of a business decision, and also relieves the cost and time challenges of responding to a previously unseen risk on the back end.About PwC
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