As the financial crisis abates, companies are likely to return to the limited “compliance-based” approach to risk management that got so many of them into trouble, according to a new study by accountants Grant Thornton.
The firm surveyed senior executives at 465 U.K. and Irish companies and found “disappointing” attitudes to risk management. Risk processes had a “genuine influence” on decision making at just half the companies in the study. And they added value at just a third.
Executives were paying greater attention to risk because of the downturn, but the study suggests that focus won’t last once things improve.
"The evidence is that the current heightened risk-management activity is part of the traditional cycle associated with economic downturns rather than a fundamental rethink,” said Simon Lowe, the firm’s head of business risk services. “I am concerned that the corporate world has not learned the lessons."
He added: “Too much risk management is driven by regulatory compliance which, as the past two years have shown, does not automatically mean that effective mitigation strategies are in place.”
The firm has launched an online tool to help companies assess their current risk position.
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