Enterprises not prepared for major risks

By on
Enterprises not prepared for major risks

A disturbing number of enterprises are insufficiently prepared to weather a serious 'risk event', according to an IBM report.

The global study canvassed 1,200 chief financial officers (CFOs) and senior finance executives from 79 countries.

Some 62 per cent of enterprises with more than US$5bn in revenue have been hit by a strategic, operational or geopolitical risk event in the past three years.

But the study revealed that 42 per cent of these multi-billion dollar organisations are ill-equipped to deal with the impact.

The study also showed that responsibility for risk management is shifting within the enterprise. CFOs are increasingly becoming the "owners" of risk event management, often sharing the burden with the chief executive.

Results of the study indicated that 61 per cent of CFOs are expected to take the lead on risk management, compared to 50 per cent of chief executives, 27 per cent of chief technology officers and 19 per cent of chief risk officers.

The most common risk encountered was strategic (32 per cent), followed by geopolitical (17 per cent), environmental/health (17 per cent), financial (13 per cent), operational (13 per cent) and legal/compliance (eight per cent).

"Globalisation presents one of the largest challenges and one of the greatest opportunities for global enterprises," said Stephen J. Lukens, global financial management leader at IBM Global Business Services.

"Forward-thinking executives locate operations and functions anywhere in the world based on the right cost, the right skills and the right business environment.

"The world is shifting towards a new definition of globalisation, but a majority of companies are still maintaining the old worldview."
Copyright ©v3.co.uk
Tags:

Most Read Articles

Log In

Username:
Password:
|  Forgot your password?