BHUBANESWAR: Indian corporates are unprepared to deal with emerging risks due to unavailability of skilled risk management professionals, non-involvement of seniors and inadequate budget and resources, a survey by consultancy firm Deloitte Touche Tohmatsu has shown.
The top three risks for the companies in the next three years pertain to technology disruptions, cyber security and regulatory risks.
“When leaders of organisations were asked how well the cyber security and technology related risks are currently managed, 64 per cent responded that it is either ‘inadequate’ or ‘needs improvement’,” the report stated. This insight is further substantiated with the fact that only 35 per cent of the organisations had a high involvement of Board of Directors in risk management, while many are still traditionally conditioned to approach risks with a reactive attitude.
The findings also suggest that 12 per cent of the organisations did not have a well-defined risk management strategy and 27 per cent were unsure of their risk management strategies.
“This essentially means that there needs to be a shift from being risk-averse to risk-aware, with the power of innovation,” said Rohit Mahajan, president, risk advisory, Deloitte India. He added that the changing trend demonstrates that with digital transformation, organisations will now need to redefine strategies as they become susceptible to multiple threats.
While they agree on the top risks, there exists a divide on the viewpoint on risk management. While 44 per cent of businesses harness risks to find future opportunities and drive returns, 36 per cent use risk management with an aim to drive compliance and prevent losses. Meanwhile, there is a growing demand for a dedicated Chief Risk Officer (CRO) position with changing dynamics and speed of business delivery, the report stated. “Although, 39 per cent of the organisations mentioned that risk management is the responsibility of each business/function and there is no separate CRO role,” it added.