Most firms fail to continuously monitor risk: Deloitte/Forbes survey

A minority of executives and risk managers monitor risk on a continuous basis, according to a recent poll by Deloitte & Touche LLP and Forbes Insights.

The survey reported that less than 25% of respondents said they continuously monitor risk, while 91% indicated they plan to reorganize their approach to risk management over the next three years (55% within the next 12 months).

Social media was identified as an increasingly important issue by 27% of survey participants.

“Social media wasn’t even on the radar a few years ago, and we’re now seeing it ranked among the top five sources of risk, on the same level as financial risk,” said Henry Ristuccia, partner of Deloitte & Touche LLP and co-leader of Deloitte’s governance and risk management services. “The rise of social media is just another contributor to the volatile risk environment companies are being forced to navigate.”

Deloitte and Forbes also discovered that risk management has become a “C-Suite” issue, with 26% of respondents noting that the overall responsibility for risk belongs to the chief executive officer, the chief financial officer or treasurer (23%) or the reporting chief risk officer (19%).

Automation and technology investments in risk management, however, were lagging behind, according to the survey. Only 28% of respondents indicated that their firms were investing in automating their risk reporting functions.

“We believe technology has the potential to play a breakout role in the management of risk, but many companies are still behind the curve in this area,” said Mark Carey, partner of Deloitte & Touche LLP and leader of the U.S. governance and risk strategies services for commercial and public sector industries. “It is encouraging, however, that more than half the respondents said their companies were planning to invest in continuous risk monitoring.”

The Deloitte/Forbes Insights survey gathered information this spring from 192 U.S. executives at companies in the consumer and industrial products, life sciences, health care and technology/media/telecommunications industries.