CFOs Embrace Strategic Risk Management For Growth
CFOs are looking for ways to maintain earnings stability and secure a competitive advantage in the uncertain economic market and are finding it in an unlikely place - risk management - according to final results of a survey released today by CFO-Research.
According to the survey, conducted last fall and just released, companies are finding numerous benefits to strategic risk management, including;
- The ability to uncover new corporate opportunities
- Anticipating unexpected events and planning for their potential impact
- Limiting potential surprises
- Creating efficiencies
- Better capital allocation
- Lowered cost of risk transfer
Risk management has traditionally focused on analyzing risk on activities or events on a case-by-case basis. But strategic risk management "should focus on the critical risks that could impact the company's business strategy," said Aon Insurance risk strategies spokesperson, managing director, Randy Nornes. Aon was one of the sponsors of the survey. "With the skittish state of financial markets today, companies can ill afford to simply respond to surprises. Leading companies are using risk assessment, risk modeling and planning to anticipate and exploit risk," he said.
CFOs point out that while they more readily embrace the notion of using strategic risk management as a tool in helping to guide the business, the human and financial resources available to capitalize on this tool are thin. With increased attention on the role of audit committees to scrutinize a company's financial direction, CFOs hope that management's response will be favorable towards funding the resources necessary to take full advantage of what strategic risk management has to offer.
"Strategic Risk Management: New Disciplines, New Opportunities" is available as a free download from the Aon Web site.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.