60 percent of organisations face risk management issues

According to a study conducted by The American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA), fewer than 35% of organizations have implemented a formal enterprise risk management program (ERM) – a framework to identify and prepare for future threats to an organization’s core business model and strategic plan.

Findings indicate that about one third, or 34%, of executives in the US are experiencing increased demands from regulators for more effective risk oversight and 19% report similar demands from shareholders. Internationally, more than 70% of firms are formally assigning managements risk oversight to their board of directors in contrast to only 46% of US companies.

About 70% of organizations felt that their risk management processes were not mature and approximately 80% have not invested in risk management training for executives in the past few years. Only 20% of organizations integrate risk management activities with performance compensation/remuneration.