A recent study has shown that, many companies have still failed to properly implement such a program, while most companies recognize the need fora good risk management program. An even greater number have said that they were developing a program while over half of the companies polled in the study said that they had systems in place for taking risks into consideration. However, these efforts are far from sufficient and had actually ceased altogether in some cases according to a follow-up study. Only a third of the companies involved in this study have successfully implemented a system and had employees well trained in order to handle risk issues, this is a two percent decrease from the previous year.
It is more than a little difficult to understand how anyone could fail to follow through on such an important aspect of defending their company against such threats by not implementing a fully developed risk management program, given the high number of unforeseen variables and risk factors currently plaguing the economy and corporate market, as well as the recent crackdown on corporate governance and fraud being conducted by government agencies.Though most indicate that it should be an executive level officer, the exact assignment of duty ends there and part of the issue here seems to be a disagreement as to whom the responsibility of developing and maintaining such a program should fall.Human capital risk, strategic risk, compliance risk, enterprise risk, and credit/market risk are contributing factor is the various divisions and contributing factors of risk management which seems to complicate matters.
Unfortunately, to have any chance of success, these are exactly the challenges that a risk management program must face, companies should begin creating these programs with this in mind. Developing a fundamental understanding of the various risk factors facing an organization and the insight to assess the degree and potential of these threats is, at its core, the most basic function of any risk management program. This will require a well-trained and dedicated team of employees to take it on effectively as this is a big job for any company to do. Also, these programs are a full time job and not something that can be set up and then checked on every now and then and this one of the biggest issues that many companies fail to recognize when putting a risk management system into effect is that. On the contrary, shifting compliance regulations, incidents of corporate fraud, and any number of other circumstances, in order to be truly effective, risk management teams must be working all the time to keep track of new threats that can arise from the chaotic global market.
So, while there are numerous factors that must be accounted for and safeguarded against, this is no excuse for a company failing to develop and implement a risk management program, while the matter of appropriation of responsibility is one that a company’s executives must work out for themselves.Admittedly, itis no easy task to develop a strong program, one which can stand up to all the various types of threats which face a company on a regular basis,though it is a necessary one if companies do not want to find themselves caught off guard when such an problem does arise.Read the rest of this entry »