Risk Management Survey: Fear of Regulators ranked Top Risk of 2019
Governance Institute of Australia has released its 2019 Risk Management Survey, which saw nearly 500 Australian risk managers and governance leaders provide their insights into the unique challenges facing their organisations, both now and into the future.
Almost unanimously across all respondents, regardless of industry, organisation size and job title, ‘Regulatory Reform / Legislative Change’ was chosen as the top risk both across the next 12 months, and the next three to five years.
“The banking royal commission, APRA and ASIC’s ongoing investigations, and the new ASX Corporate Governance Council's Corporate Governance Principles and Recommendations have also forced organisations outside of the financial sector to look at their governance frameworks, including how they manage their culture, ethics and risk profile.
“The survey shows there is still a lot of confusion and nervousness in the market, especially about reporting requirements, roles, and engaging the newly strengthened regulators. That correlates with what we have also been hearing anecdotally from our members and partners as well,” said Megan Motto, CEO, Governance Institute of Australia.
Damage to Brand or Reputation (#2), Increased Competition (#3), Talent Attraction/Retention (#4) and Cyber-crime (#5) followed to round out the top five risks facing Australian organisations over the next 12 months.
In the context of the recent Federal and State Elections, respondents ranked risks such as Political Instability (#8), Environmental Risk/Sustainability (#11), and Economic Shock (#7) further down in their priorities over the next 12 months, and in 3-5 years.
When asked to score their organisation’s current preparedness, again Regulatory/Legislative change topped the list, followed by Professional Liability, Staff Conduct, Damage to Brand and Reputation and Business Continuity, which shows that organisations have acted swiftly to manage these concerns.
Talent Retention/Attraction ranked last in terms of current preparedness (average of 5.8/10) and was followed closely by ‘Disruption / Failure to Innovate’ (6/10) highlighting the competitive pressures local companies are feeling from multi-national giants, such as Amazon, Apple, Google and Facebook. Disruption jumps to #2 in the 3-5 year risk rankings.
“While talent management, namely keeping and retaining star performers is a risk as old as business itself, the fear of the new, disruption, is obviously on the mind of Australian leaders. Technologies such as Artificial Intelligence, Machine Learning, Block chain, Data Storage and Privacy, are increasingly turning up in the media, in our conversations with members and partners, and in the educational courses we provide.”
While respondents felt that Risk Management was highly valued by their organisations (70% agreed/strongly agreed), the need for ‘better tools and resources’ (29%) to manage risk and ‘clarity of purpose and strategy’ (23%) from senior leadership were key areas of concern.
“Despite the apprehension, we are seeing in the market, there are a number of positives. I think it’s safe to say that governance and risk professionals have never been so valuable. They are increasingly being relied on at board, and executive level to provide the right data and analysis, strengthening their trusted advisor status. It is our job at the Governance Institute to ensure that they have that knowledge available.”
Additional survey information
- 499 respondents, surveyed from 3 April to 3 May 2019
- Seniority: 38% Senior Governance/Risk Managers, 21% C-Suite. 27% lead the risk management team in their organisation.
- Organisation revenue: 39% of organisations surveyed had revenue over $100m, 45.4% $1m-$100m
- Top five industries: Financial Services (20%), Healthcare (17%), Education (15%), Professional and Technical Services (11%), Public Sector (11%
- 31% operate in other countries, as well as Australia
The findings will also be discussed in greater detail at Governance Institute’s Governance and Risk Management Forum in June, click here to review Adelaide, Brisbane, Perth, Melbourne and Sydney keynote speakers. Press passes and keynote speaker interviews available.
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Media contact: Hannah Edwards, firstname.lastname@example.org
About Governance Institute of Australia
A national membership association, advocating for a community of 40,000 governance and risk management professionals from the listed, unlisted and not-for-profit sectors. Our mission is to drive better governance in all organisations, which will in turn create a stronger, better society.
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