Organisations that have a mature risk management outlook are more likely to run business strategy projects successfully, according to a report by global accounting firm Ernst & Young (EY).
EY’s report, ‘Turning risk into results: How leading companies use risk management to fuel better performance’, examined the relationship between risk management maturity and financial performance in more than 2,700 companies, concluding that there was a positive relationship between the two.
“Companies with more mature risk management practices outperform their peers financially. Our client experience, research and study results strengthen that perspective,” said Randall Miller, Global Advisory Risk Leader for Ernst & Young.
EY’s research showed that those organisations that have shifted from risk management in just financial controls and regulatory compliance to using risk management in business strategy outperform others that are less mature in their approach.
The report suggested that because of risk’s previous role in compliance activities, senior executives may not perceive risk management as strategic to the enterprise: “Senior executives also may not have sufficient confidence in their ability to identify and address the risks that could impact the financial performance—or even the viability—of their organisation.”
The link between mature risk management and projects that support business strategy also allows organisations to perceive risk differently, taking into account both threats and opportunities.
Download the report and find out how risk-mature organisations turn risk into results.