UK - Growing numbers of company finance chiefs are showing signs of dissatisfaction with current risk management standards, although corporate governance experts are sceptical.
Preliminary findings based on a survey by consultants Aon reveal that over one fifth of chief financial officers have concerns around the efficacy of their current risk management strategies. More than 20% of senior financial executives at multinationals said they were “very” or “somewhat dissatisfied” with current practices, followed by 30% who were only “somewhat satisfied”.
At the heart of the concern is the widespread practice of managing risks within business units rather than across the enterprise. As a result 75% of respondents favoured broader involvement of board audit committees.
But the push to fully integrated enterprise risk management is causing concern among corporate governance experts who say that audit committees may be overextended.
According to Dennis Mahoney, chairman and chief executive officer, Aon UK, most experts agree that audit committees have to be anticipatory and need to have open communication with management.
At the same time they have to guard against the kind of over-zealousness that implies the best way to deal with risk is to avoid it altogether, he added.
About 73% of the CFOs surveyed want greater involvement of audit committees in aligning risk management with corporate goals, some believing that strategic risk management can improve capital management also.
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