Global survey finds risk recruitment is needed now
[Thursday, 19 November 2009]

The global financial crisis has prompted a wholesale re-evaluation of risk management. However, companies do admit that major change is needed but a significant proportion is unwilling or unable, to make changes, including necessary recruitment.

A report released today, Beyond Box-ticking: A new era for risk governance, written by the Economist Intelligence Unit and sponsored by KPMG and ACE, finds that a lack of financial resources will be the biggest barrier to effective risk management in the year ahead.

Asked about the barriers to effective risk management in their organisation, the 364 risk professionals interviewed point to poor data quality, inadequate technology and a lack of expertise.

KPMG’s National Risk Management Partner, Sally Freeman, said that while experienced Chief Risk Officers are a scarce commodity in Australian business, their employment opportunities are improving.

“I have received a number of calls recently from different employment agencies and clients looking for the right risk manager, signalling that the appetite for risk management is growing,” said Ms Freeman.

While the Australian market may be warming up, the survey reveals a surprising reluctance to recruit risk expertise, particularly at the top of the organisation, with more than half of respondents saying they do not plan to recruit at the senior level.

“From a Board perspective, strong risk management skills are rare and potentially undervalued in a field dominated by financial and legal expertise.

“Senior management from board level down must place a greater emphasis on establishing a pervasive and robust risk culture or face the impact and consequences at every level of the organisation,” she said.

Ms Freeman said that linking risk management to decision-making in the boardroom will be vital for future success. “This will require more knowledge of the risk appetite, the risk profile and the control environment,” she said.

“The issue we face globally and most certainly here in Australia is that rather than addressing the key risk management issues, which also have the biggest profit impact, companies are instead opting for some quick wins by improving their processes.” she said.

The survey found that while 63 percent of respondents agree strong leadership from senior management is crucial to good risk management, compliance, controls and monitoring are consuming a disproportionate amount of time and resources. Only a third think their organisation is effective at ensuring information about risk is reaching the right people.

”If we’ve learned anything over the past 18 months, it is the importance of adequate risk management starting from the top down. At a time when risk is dominating boardroom agendas, there is a rare and valuable opportunity for senior risk professionals to take a seat at the top of the table, and to make themselves an indispensable part of any discussion about the future of the business,” Ms Freeman added.

KPMG