Underestimated Level of Risk

“Corporate leaders are focusing more attention on risk management after excessive risk-taking during the boom times helped bring about a global financial crisis,” according to a survey of senior executives by Korn/Ferry International, the world’s largest recruiting firm.

Korn/Ferry surveyed several hundred executives in more than 65 countries and about 57 percent of the senior executives surveyed said their companies were spending more time dealing with risk management, while 26 percent said there had been no change at all. Only 14 percent said their companies were actually spending less time on risk management. The increased focus on risk has resulted in” hiring executives who understand the key part risk assessment plays in setting good strategy,” Steve Mader, vice chairman and managing director of Korn/Ferry Board Services told DealBook. As a result, about 58 percent of those surveyed said they believed that their companies had imporved the quality and timeliness of internal oversight and reporting to their boards.

“Boards and CEOs are reporting that the overriding lesson of effective risk management is that it must become and integrated element of strategy,” Mr Mader said,” Corproate leaders increasingly see the levels of risk and the metrics of risk as inherent components of developing and executing strategies and in evaluating the appropriate tolerance for risk.” (NY Times, August 10, 2010 )