Page 31 - Risk Management Bulletin April-June 2022

RMAI BULLETIN APRIL - JUNE 2022

on corporate resilience. The survey drew responses adopted a holistic view, looking at the geographic
from more than 200 senior executives and risk and footprint and compliance issues, among other factors.”
insurance professionals, reflecting a wide range of Survey results included these findings:
industry sectors and countries. The survey probed for Y Nearly two-thirds of responding companies said
views on the relevance for organizations, the that resilience is central to their organizations’
capabilities for managing strategic resilience, and the strategic process—either as a top priority or to an
importance of resilience in and across corporate important extent. Risk and insurance managers
functions, including strategy, operations, and risk. are strongly involved in resilience areas, including
operational resilience and digital and technology
The executives revealed that in the past, their risk resilience. In addition to those two areas, finance
management focus was on a small number of well- and operations were more often cited by survey
defined risks, primarily financial risks. They told us that respondents as the four most important resilience
now, risk is encompassing the broader mandate of areas.
resiliency management. It is woven into long-term
Y Foresight capabilities (scenarios and stress testing)
strategy development at top organizations, helping emerged as one of the core areas for
companies navigate a far more dynamic operating
improvement. Companies were split in their use
environment. of scenarios and stress-testing exercises. Roughly
half of executives rarely or never use them in
Almost 60 percent of respondents feel their strategic decision making, and half use them often
organizations have excellent or very good resilience or in every risk and resilience exercise.
capabilities, meaning they are well equipped to build
Y The pandemic continues to highlight the need for
and manage resilience overall. In part, that is a direct
response to the pandemic, which broadened leaders’ secure and flexible technical infrastructure and the
strong intersection of digitization within other
view of the risk function beyond one or two specific
resilience areas, including implementing work-
risks. More than half of respondents acknowledge that
the global pandemic has made risk and resilience from-home processes.
significantly more important to their organizations. Y Risk functions and executive teams play leading
roles in building a resilient organization, much
Among specific areas of resilience, companies are more so than strategy teams. However, risk
clearly focusing on workplace safety and remote managers are not yet at the center of resolving
working in managing through the pandemic. More crises at all times. A better risk governance model
than 75 percent say implementation measures in these is key for efficient and effective decision making
two areas are largely completed. Fifty-two percent of and crisis management.
respondents said that for their organizations, the most
effective capabilities are in place to manage financial To strengthen resilience in the future, most risk
resilience. managers (75 percent) believe that the most important
actions will be to improve risk culture and strengthen
At the same time, executives reported room for the integration of resilience in the strategy process.
improvement. Management of business operations Important additional areas are improved risk data
and the supply chain emerged as weak points during aggregation and reporting and more advanced
the pandemic. Many companies have yet to fully foresight capabilities. Executives also want to revisit
implement new remedial measures. Senior executives risk governance and radiate a better understanding of
state that risk is still mainly involved in crisis response. the critical role the risk function plays.

“We are learning from the crisis, reviewing, for The challenge now is to move out of a reactive, crisis
example, our evaluation process for suppliers,” said the response mode and integrate risk with other core
chief risk officer at a company in Italy. “In the past, we functions on a more permanent basis. Likewise, as they
focused mainly on financial impact but have since guide their organizations in the transition from crisis

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