Swiss Re study lists 2006 corporate risks

Computer-based risks, foreign trade and corporate governance are the leading corporate risks of 2006, a Swiss Re study has found.
The survey polled senior executives in six large, industrial countries including France, Germany, Italy, Japan, the U.K. and the U.S. The results were presented recently at the World Economic Forum’s Annual Meeting.
The study found that, while risk assessment is becoming a more prominent concern among many senior executives, there is a discernable gap between assessing risk and adopting comprehensive risk mitigation strategies. The study also validated that risk management is a tool used to protect shareholders’ value and ensure the company’s continued successful operation.
Key findings from the survey include:
– Some risks spanned all countries surveyed: The greatest risk concern among global executives is the threat of computer-based risks (defined as hackers, unauthorized disclosures, viruses/worms, piracy, disruption of electronic infrastructure, data storage and/or telecommunications), which placed in the top three for executives in all six countries.
– Other risks were more sector specific: Concern over corporate governance issues ranked high (2nd place) among executives in the financial sector, whereas executives in manufacturing rated the same risk much lower (ranked 11th).
– Risk mitigation tools were similar: Executives favor internal controls as their primary risk management tool, though insurance and financial hedges are also important.
– Executives share focus on emerging risks: Natural disasters, computer-based risks and potential global pandemics, such as avian flu, top the list of emerging risk concerns.
“The remarkable consistency in risk concerns among senior executives of multinational corporations supports the need for global best practices in risk assessment and planning,” Jacques Aigrain, Swiss Re’s CEO, said. “To advance the development of these solutions, insurers need to design and articulate the benefits of risk transfer and partner with governments and judiciaries to address regulatory and legal reforms on a broader scale.”
Most of the risks mentioned in the survey are seen by executives to have a long shelf life risks that will persist for years to come. However, some risks such as accounting rule changes and civil unrest or disturbances, were viewed by senior business leaders as short-term (extending over a period of approximately two years).