Governance, risk, and compliance (GRC) professionals have had a lot to focus on over the last year―remote work, operational resilience, digital transformation, changing regulatory standards. With so many urgent issues, there has been little time to take stock of how they can improve on day-to-day activities.
Most organizations recognize that risk management is critical to their business. But are they evaluating how well their programs are working? How can an organization confirm it’s effectively capturing and managing risk?
What Risk Professionals Are Saying
In LogicGate’s second annual Risk Management Survey, 190 senior executives shared some thoughts on the relative strengths and weaknesses of their own risk management programs and what they’re focusing on in 2021.
Given the increasing uncertainty in the market today, risk management has become an elevated priority. Boards and senior executives are prioritizing risk management and recognize that understanding how risk impacts their organizations is essential for building operational resilience. Organizations perceive operational resilience as a critical skill for navigating the rapidly changing operating, regulatory, and economic environment.
This evolution confirms risk management is about more than deflecting or mitigating risk, it has become embedded in the strategic decision-making process of every organization. So it’s not surprising that 91% of survey respondents said that risk management was extremely to very important to their organizations, with consensus across sectors, industries, geographies, and even company size.
Effective risk management has evolved from solely protecting firms from operational missteps to helping firms become adaptable and gain competitive advantage. To support this evolution, risk programs must become dynamic tools that can support enhanced decision-making.
The Evolution of Risk Management
Risk management programs need to do more than identify risk―they must also be capable of assessing, managing, and monitoring risk. For the organizations surveyed, risk programs were generally good at the identification role, but satisfaction clearly diminished as risk professionals looked more holistically at what they wanted their risk programs to be able to do.
Once companies are able to identify and analyze risks, they can employ structures and practices that strengthen their ability to quickly adapt to changing circumstances. For risk management to go further and support operational resilience and build a competitive advantage, risk programs need to be strong at more than just risk identification―they need to enable cross-functional collaboration, risk-informed decision-making, and reporting capabilities.
A holistic risk management program can help organizations gain confidence in their ability to make well-informed business decisions and adapt as circumstances change.
Learn about what other risk professionals are focusing on to support operational resilience at their organizations and other key insights from LogicGate’s second annual Risk Management Survey by downloading the report here.