A new survey has found that directors are becoming more focused on their business risk management practices in the financial crisis, but lack the follow through and knowledge to implement such practices.
The survey of 156 chief financial officers (CFOs) conducted by global business and risk consulting firm Protiviti, revealed that 67 percent respondents had observed an increase in their board’s scrutiny of risk management practices.
However, when asked if the board has administered checks on the effectiveness of the risk management policies, a staggering 60 percent noted no change.
According to Mark Hamill, managing director of Protiviti, the financial crisis has forced businesses to assess their risk management strategies more thoroughly. But the failure to administer an internal audit process is a sign that businesses “lack the confidence in their internal audit team or are unaware how a capable internal audit team can support them.”
Further to this, while the vast majority of organizations recognised their risk managemrnt strategies were far from perfect, 73 percent were unwilling to make the necessary investment to bring it up to scratch.
Hamill said that while it is understandable businesses are tightening their belts, they should be “strengthening their risk management” as it “protects the business in tough times.”
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