Survey: boards failing to manage risks.

Boards of directors are spending more time thinking about risk management--but are doing so grudgingly, according to a survey by Lloyd's and the Economist Intelligence Unit.

In a survey of 100 business leaders, Lloyd's found that boards have increased the amount of time spent on risk management fourfold in the past three years. Yet one in five companies suffered "significant damage" from failing to manage risk adequately last year, and more than half of all companies had one "near miss," the survey found.

While corporate scandals and tightening regulation have caused roughly two-thirds of companies surveyed to reassess their risk management strategies, fewer than half of the companies surveyed have done so in response to the threat of terrorism, and only one in four has done so as a result of growing climatic and natural hazard risks.

"Perhaps as a result, just 14% of board members are confident that their organizations' boards understand, and will respond correctly to, risks facing their foreign operations," Lloyd's said in its report.

Just half of the companies said that risk management is centralized and overseen by the board.

Less than a third of boards feel that technical risk management skills and qualifications are important or train their staff in these skills. Just 18% of board members have received training in how to implement risk management across their organizations.

"Whether the lack of preparedness to anticipate and deal with risk reflects misplaced confidence or ignorance is debatable," David Foreman, chief underwriting officer at Lloyd's insurer Wellington, said in a statement. "But until boards start to tackle these issues, risk management is likely to be seen by senior management as a constraint on their business, rather than the source of competitiveness it should be."