Directors of large U.S. companies are not fully engaged in critical enterprise risk management efforts, according to corporate risk managers in a study by Greenwich Associates.
The risk managers at these companies report that enterprise risk management has become a widely accepted concept within their organisations and that their boards of directors are well versed on risk issues.
However, many risk managers say their boards of directors have to this point failed to provide leadership in establishing effective enterprise risk management practices.
Less than 20% of companies participating in the study say their boards of directors fully agree that enterprise risk management is a real strategic imperative for their companies.
"Although the majority of risk managers say their boards of directors accept the validity of enterprise risk management in theory, the results of the study suggest that directors engage the issue only at a very high level, rather than becoming actively involved in establishing ERM in the company's day-to-day operational practices," says Greenwich Associates consultant David Fox.
"We find this remarkable given the current economic and political environment."
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