India lacks management
KPMG says while regulatory changes in those regions in the past several years have tasked company boards with aligning strategy, risks and rewards, many companies are too bogged down in a 'keep us out of trouble' mentality.
As a result, incorporating risk management tools and practices into strategic decisions, such as investment in new markets and capital allocation, is not getting the attention it needs, says the firm.
The survey entitled 'Risk management: A driver of enterprise value in emerging environments' polled nearly 500 companies - more than half of them based in India - across a variety of industries.
According to the research firm, the key to effective risk management lies in untangling it from regulations, states CIOL.
The survey reveals that risk management policies and responsibilities are informal in India to a certain extent when compared with more developed markets such as Europe.
Ashley Smith, KPMG head of internal audit, risk and compliances services, says: “The key to effective risk management lies in untangling it from regulations and making it more useful to today's business leaders as a strategic tool for effective decision-making.”
The survey found more than 77% of Indian firms faced increasing risks in the past two to three years, but only 59% of them had a formal risk management framework in place, reveals Calcutta Tube.
Also, a majority of the companies claim they were not entirely confident that the risk management policy in place was good enough to identify emerging risks.
About 68% of surveyed respondents say their company does not have a chief risk officer and 37% of them do not intend to appoint one.
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