A new report released today by The Economist Intelligence Unit during the Economist Conferences’ Risk Summit, hosted by Willis Group Holdings in London, revealed the importance of looking beyond the current risk horizon and how executives can equip their organizations to deal with future risks and deliver long-term performance.
Willis said the report, Getting New Perspective on Strategic Risk, “surveyed 500 global business executives.” It “highlights the dangers of allowing current challenges, from the on-going euro-zone crisis to the prospect of a double-dip recession, to take priority over long-term planning.”
Essentially many business leaders “naturally focus their attention on the immediate future and ensure their short-term financing needs are met.” However, the report warns, “by prioritizing short-term profits over long-term performance businesses reduce their chances of sustainable success.”
Some key findings of the research include:
• Long-term risk management is rising on the agenda for many business leaders: Over the past year, 50 percent of companies say that they have made their risk management more forward looking and agree they should spend more time thinking about the risks they will face 10 years from now..
• Links between risk management and strategy are strengthening in many organizations: More than half of respondents say their risk function plays a formal role in strategy-setting and evaluating new market investments.
• Many companies are using scenario planning, but few embed it into the overall strategy process: Only 20 percent of respondents say that scenario planning plays a vital role in helping their company to formulate and adapt strategy in uncertain times.
Willis Group President Grahame Millwater commented: “Establishing long term risk management at the heart of strategic planning is essential to the future success of any commercial organization.
“The findings of this latest global risk survey by the Economist Intelligence Unit reveal that although we must address the challenges facing us here and now, we must also reflect upon how we are preparing our companies to face longer-term risks in order to protect our future and ensure the sustainable growth and value of our businesses.”
The Summit, which was held at the Willis Building in the City of London, brought together more than 60 senior business executives from a cross-section of industry. Speakers included: former Secretary of State for Defense Michael Portillo; Keiran Foad, Chief Risk Officer of Northern Rock; Luke Savage, Director, Finance, Risk Management and Operations, Lloyd’s of London; political campaign expert George Bridges MBE, of Quiller Consultants; and Dr Mils Hills, an anthropologist specializing in disaster and emergency planning.
Source: Willis Group Holdings
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