Fewer companies than expected plan to scale back risk management departments

The adoption of enterprise risk management seems to have reached a plateau at 65% of firms, according to a joint Marsh and Risk and Insurance Management Society report.
In the sixth annual Excellence in Risk Management VI: Strategic Risk Management in Practice, 450 risk managers were surveyed during 2009 Q1 about the impact of the financial crisis on their risk management programs and strategies.
Sixty-seven per cent of businesses reported plans to adopt a more strategic approach to risk management, of which ERM is generally seen as a component.
“While the movement toward partial implementation of ERM may now be somewhat related to current economic conditions, it’s more likely that many risk managers view partial implementation of ERM as a step along the way,” said Richard Roberts, a member of the RIMS board of directors.
The study also found that despite the tough economy, 14% of companies are planning to increase risk management staffing and 6% suggested they plan to create a corporate-level risk management function.
Given the deep recession, 13% of firms are considering reducing risk management staffing, the study also found.
“Senior executives remain committed to this process, but need to know more about how ERM adds value,” Roberts added.
“In fact, the value ERM brings to a firm comes in many areas that are not easily quantifiable, making it important for risk managers to effectively point out the qualitative benefits in addition to other return on investment metrics.”