New KPMG survey reveals connection between risk and strategy
- 13th October 2015
- Business & Economy
KPMG’s new survey “Calibrating Strategy and Risk” reveals that many boards fail to make the connection between the two.
Company strategy and risk assessment are important aspects of involvement for corporate boards, but work needs to be done to comply with the 2014 UK Corporate Governance Code, according to the Big 4's study.
The new report from KPMG’s Audit Committee Institute says that in order to comply with the Code, boards must make a robust assessment of the principal risks facing a company, as well as examine how strategy aims can be delivered.
Only 51% of UK audit committee members who took part in the survey were satisfied that strategy and risk were linked effectively in boardroom consultations.
Timothy Copnell, Chair of the UK Audit Committee Institute, commented: “The complexity and global volatility that we’re seeing – swings in commodity prices and currencies, a decelerating China, uncertainty linkin geopolitical hotspots, technology innovation, and disruptive business models – are clearly impacting the board’s involvement in strategy and risk.”
The survey responses were built up from 100 senior UK audit committee members and more than 1000 directors worldwide who took part in the survey.
The results showed that significant challenges include linking strategy and risk in a clearer way and one that gives the connection a higher priority on company agendas.
Although he welcomed the issue being raised, Copnell added, “There is a danger that many boards are seeing risk management as a ‘bolt-on’ exercise which potentially leaves them exposed to the strategic risks that could affect the company as well as its long term viability.”
The first step to building or expanding a business is creating a concrete business development plan. Entrepreneurs will find plenty…
Every business operates with the goal of growth, but only a few manage to beat the competition at every curve.…