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Financial Leaders Understand Risk, but Just Few Can Face It

Despite how essential it is to tailor risk in line with core business strategy, Just about 25% of financial leaders feel that they can confidently carry out an appropriate response to risks, while about 60% feel they are too late in realizing the major risks facing their business.
The Financial Executives Research Foundation (FERF) in partnership with Grant Thornton LLPmade these disturbing discoveries in their latest report– The Strategic Financial Executive: Managing Risk in a Disruptive World. The report was based on interviews with corporate stakeholders, top financial executives and CFOs, as well as in-depth discussion with the committee members on Governance, Risk & Compliance at the Financial Executives International (FEI).
Notable recommendation from the report is that companies should invest in better risk management procedures in order to beat any disruption or change, specifically procedures that are in line withrisk strategies as well as business and performance objectives. Leaders should work together with third parties who have the better understanding of risk management. The report also implores companies to adopt processes that promote risk sharing across their leadership structures to promote improved decision-making and strategic communication.
According to Grant Thornton’s Risk Advisory Services partner, Bailey Jordan, there is a multi-directional and multi-dimensional astronomical growth in risks. Leaders can be at the top of their game in helping their firms mitigate risks by looking beyond financial indicators to other metrics that weigh business health.
Revelations by the report fingers an entity’s workforce as a great starting point. It shows that 95% of executives agree that businesses must encourage their personnel to be alert in identifying potential risks, also buttressing the essence of risk culture formation through employee training centered on skills improvement. Lastly, the report advocated that leaders should make their board members aware of efforts made to curtail risks that affect essential business segments like competitive positioning, business objectives and, finally success.
According to President and CEO of Financial Executives International and Financial Executives Research Foundation, Andrej Suskavcevic, the increasing rate of regulatory changes, technology, competition and other factors pose new risks to all kinds of businesses. Financial executives and CFOs are expected to advise Boards of Directors and CEOs of these changes, and working together with others in the firm to help point out risk and manage them. This report helps implore financial executives and CFOs to lead their departments in very cutting edge and strategic ways.