57% of survey respondents say risk culture has changed for the better since the pandemic
As corporate collapses make headlines this year the need for strong risk management is clear. This is why the Association of Chartered Certified Accountants (ACCA), The Association of Insurance and Risk Managers (Airmic), and the Professional Risk Managers’ International Association (PRMIA) have collaborated on a new study that gauges how risk and financial leaders are dealing with risk culture and to what extent they understand its effect on the organisation’s broader strategy.
The research is based on an online global survey complemented by a mix of interactive engagements with the three professional bodies’ respective members, gathering views from thousands of risk and financial professionals around the world. The findings are published in a new report, Risk Culture: Building Resilience and Seizing Opportunities. Read the full report and its supplements here.
This first of its kind study found that while 'box ticking' is prevalent there is growing interest in risk culture to cope with disconnected organisational cultures and hard-to-detect breadth of risks.
Key risk priorities for risk and finance professionals across all regions were ‘regulatory, compliance and risk’ followed by ‘technology, data, cybersecurity’ and ‘economic inflation and recession’.
Sector-specific results showed respondents in financial services were more likely to raise ‘technology, data and cybersecurity’ and ‘regulatory, compliance and legal’ as their two highest risk priorities, whereas those in the corporate sector ranked ‘logistics and supply chain’ issues as one of their top three risk concerns. Interestingly, despite a rise in corporate fraud cases, the corporate sector ranked ‘misconduct, fraud and reputational damage’ lower than any other sector.
Some of the overarching concerns coming out of the report are that risk conversations continue to happen in a vacuum at the top of organisations, and that engagement not only between boards and senior management – but also across functions and roles – needs significant improving.
‘Recent corporate collapses remind us of how inadequate and siloed risk governance can be, regardless of what is said in their financial statements,’ said Rachael Johnson, head of risk management and corporate governance at ACCA and author of the report. ‘As our research shows, it is not only the regulators who are asking questions. In today’s highly interconnected, digital world, even a weak risk culture is better than none.’
‘In an increasingly high velocity, complex and connected world, tensions can be created between managing performance, innovation, controls, and assurance.’
Julia Graham, CEO of Airmic, a partner said: ‘This report addresses how risk culture can contribute towards managing these tensions as part of good governance and concludes that managing risk dynamically and building resilience collaboratively are changing risk culture for the better.’
‘Recent events, such as FTX and Silicon Valley Bank, show us that risk culture, more than ever, needs to be front and center for risk and accounting professionals,’ said Justin McCarthy, CEO of PRMIA. ‘This report shows how we need to help our respective members work and learn together more.’
The report incorporates insights from over 2,000 risk and financial professionals around the world. The online survey took place in October 2022 and attracted 1,823 individual responses from risk and financial professionals globally, across a range of industries. The majority of these individuals have accountancy backgrounds (93% being ACCA members). Additional forums, roundtables and one-on-one interviews with more ACCA members contributed further qualitative data.
A supplementary document to the report – Risk Culture Conversations – digs into the two open-ended questions from the survey as well as these discussions and input from our online community pop-up platform, which took place in November 2022.
To complement the findings, the report also includes ten calls to action.
ACCA will publish additional research on risk culture by industry throughout 2023.
Julia Graham, CEO of Airmic
Justin McCarthy, CEO of PRMIA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants.
We’re a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.
We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organizations and flourishing societies.
Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report.
We believe that accountancy is a cornerstone profession of society and is vital helping economies, organisations and individuals to grow and prosper. It does this by creating robust trusted financial and business management, combating corruption, ensuring organizations are managed ethically, driving sustainability, and providing rewarding career opportunities.
And through our cutting-edge research, we lead the profession by answering today’s questions and preparing for the future. We’re a not-for-profit organization. Find out more at accaglobal.com.
The leading UK association for everyone who has a responsibility for risk management and insurance in their organization, Airmic has over 450 corporate members and more than 1,750 individual members.
Individual members are from all sectors and include finance, sustainability, information and technology, internal audit, and legal professionals, as well as risk and insurance professionals. With our partners, and in collaboration with affiliate associations and institutes, Airmic supports members through learning and research; a diverse programme of events; developing and encouraging good practice; and lobbying on subjects that directly affect our members and their professions. Above all, we provide a platform for professionals to stay in touch, to communicate with each other, and to share ideas and information.
Established in 2002, the Professional Risk Managers' International Association (PRMIA) is a non-profit, member-focused and member-driven professional association represented globally by more than 50 chapters in major cities around the world. PRMIA’s mission is to provide an open forum for the development and promotion of the risk profession through credentialing, learning and development programs, online thought leadership resources, and events. To learn more, visit www.prmia.org.