European companies are prioritizing risk management more than ever due to global competition and the ongoing effects of the financial crisis, though some weaknesses remain. Top management and boards are increasingly overseeing risk management and integrating it with strategy. However, only 17% described communication between executives and chief risk officers as comprehensive, and 40% have not established cross-functional risk committees. Strategic, financial, IT, legal/compliance, and reputation risks were the top concerns.

1. 22 August 2013
Press release
Risk management is prioritised as never before – some
weaknesses remain
Buffeted by global competition and the continuing aftermath of
the financial crisis, European companies are prioritising risk
management as never before,althoughsome weaknesses
remain.
These findings come from research on risk
managementleadership conducted with risk managers from the
Federation of European Risk Management (FERMA) and the
public sector associations PRIMO by Harvard Business Review
Analytic Services sponsored by insurerZurich.
In their responses, more than 200executives at major
European organisations emphasise how top management and
the board are increasingly setting direction and taking tighter
control of risk management, integrating it with overall
company strategy and embedding it deeper into corporate
culture.
In 2014, FERMA will conduct its pan-European risk
management benchmarking survey which will delve further
into some of the issues highlighted by these results.
The current survey indicates that, at 35% of organisations,
either a CRO or a risk manager has direct responsibility for
risk management. At 27%, either the CEO or the
CFO/treasurer has direct responsibility, while the board itself
is responsible at 14%.

2. In all cases, companies emphasise the importance of board
engagement. FERMA board member Jo Willaert, Corporate
Risk Manager of Agfa-Gevaert, said “You need the support of
the board. If you do not have the support of the board, it will
not work.”
The majority of companies have education and review
processes in place to keep the board and the senior executives
informed about their risk exposures. Key risks are
communicated to the C-suite regularly at 70% of organisations.
More than half the organisations surveyed, 56% said, they have
increased the resources devoted to risk-related education and
training over the past three years for chief risk office level and
above, at the least.
Making these processes work requires a conduit for risk
information: 75% cited the risk function as a channel by which
information, intelligence and advice on risk reaches senior
management.
However, only 17% of respondents described communication
between the C-suite and the CRO as being comprehensive or
nearly so. More than one in four, 29 %, expressed concern
about a „good news culture‟ that meant management did not
receive unvarnished information on risk.
And 40% said their organisation has not yet set up a broadbased, cross-functional risk committee–despite the crucial role
the risk committee plays in making sure that risk data are
discussed thoroughly and passed on to the board.
The survey also found that companies have been slow to
adopt risk-based incentives as part of compensation. Only 12%
said they align risk management with executive pay.
Jo Willaert commented said: “These are not essentials for a
successful risk management strategy but they show risk
management has room to grow in the C-suite.”
Companies aspire to forge closer links between risk
management and strategic planning. Roughly half said their risk
management process is closely or very closely aligned with
their overall strategy and budget. At the same time, there has
been less progress at bringing the risk function‟s resources to
bear on transformative business projects, such as mergers,
acquisitions and divestments. Only 20% described the risk

3. function as a tool for making more effective strategic decisions
and investments.
Priority risk areas
These were the risk categories to which respondents ranked
as of greatest concern:
Strategic
Financial
IT/data privacy
Legal and regulatory compliance
Brand/reputation
Market/competition
Technology
Systemic
Political/geopolitical
Workforce
Natural disasters
Terrorism/violence
63%
55%
44%
44%
42%
42%
41%
37%
35%
33%
20%
10%
Further research
[URL address of the report]
For more information, contact
Lee Coppack
FERMA media coordinator
or +44 (0)20 8318 0330/+44 (0)7843 089904
Or
Florence Bindelle (assistant Christel Jaumoulle)
FERMA executive manager
florence.bindelle@ferma.eu or +32 (2) 761 94 31
About FERMA
The Federation of European Risk Management Associations
(FERMA) brings together 22 national risk management
associations in 20 European countries. FERMA has 4,200
individual members representing a wide range of business
sectors from major industrial and commercial companies to

4. financial institutions and local government bodies. These
members play a crucial role for their organisations with
respect to the management and treatment of complex risks
and insurance issues.
Member associations are from the following countries:
Belgium (BELRIM), Czech Republic (ASPAR CZ), Denmark
(DARIM), Finland (FinnRiMa), France (AMRAE), Germany
(DVS/BfV), Italy (ANRA), Luxembourg (ALRiM), Malta
(MARM), Netherlands (NARIM), Norway (NORIMA), Poland
(POLRISK), Portugal (APOGERIS), Russia (RusRisk), Slovenia
(Sl.RISK), Spain (AGERS and IGREA), Sweden (SWERMA),
Switzerland (SIRM), Turkey (ERMA) and United Kingdom
(Airmic).