Half of US firms unhappy with risk effectiveness

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Nearly half of risk management professionals rate their organisations to be less than "very effective" at identifying and managing their significant risks, leaving them vulnerable to unanticipated losses, reduced productivity and business disruptions.

That was one of the findings of the 2007 US Risk Barometer from consulting firm Protiviti. The report, which analyses the risk profiles and risk management practices and strategies being employed today by America’s largest organisations also found competitor risk to be the highest ranked risk respondents claim their businesses are facing today.

Other major risks that made the top 10 included customer satisfaction, regulatory environment, information systems and IT security, and changing markets, according to survey responses from 150 C-level executives.

The report also found that views about the benefits of risk management are evolving towards an increased appreciation of the potential organisational impact. In the 2006 survey, "lower insurance premiums" were the top-ranked benefit while this year, "quicker identification of risk" was the most frequently cited benefit.

Protiviti currently has Risk Barometer studies underway, or in the planning stages, in 10 countries worldwide. It is looking to identify the nature of the risks undertaken by leading corporations, understand the appetite for risk and concerns with regard to risk of senior executives, and evaluate the current state of these corporations' risk management capabilities.

The full US report can be accessed for free on Protiviti’s website: www.protiviti.com.