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Top C-suite worries revealed.

Regulatory pressure is consistently rated one of the biggest threats facing companies. According to a recent survey a full 70 percent of C-suite executives across all industries say that regulatory changes have caused either substantial or moderate changes in their risk management and reporting processes in the past two years.

The report for KPMG International's survey of more than 1,000 C-suite executives, Expectations of Risk Management Outpacing Capabilities--Time for Action, also includes real-world insights from top executives with risk management responsibility at major companies.

Among the key findings:

* 59 percent of C-suite executives at financial services companies and 53 percent of C-suite energy and natural resources executives identified regulation as their top threat;

* 50 percent of health care executives said government pressure to contain spending was their biggest threat;

* 49 percent of executives in diversified industrials said an economic slowdown in OECD markets was their biggest risk;

* 44 percent of executives in technology, media and telecom said a slowdown in demand was their biggest threat;

* 86 percent of survey respondents said risk management is factored into strategic planning decisions;

* Two thirds of respondents said they will invest more in risk management as a proportion of corporate revenue in the next three years than they did in the previous three;

* Almost half profess difficulties in understanding their enterprise-wide risk exposure;

* Less than one fifth have developed a formal risk appetite statement, yet this is an important step in risk management;

* Less than half believe their organization is effective at developing stakeholder's understanding of the risk program; and

* 43 percent said there was a weak link between risk management and compensation.

"We found that risk management is not advancing fast enough at most companies in the face of an array of threats in an increasingly complex global economy," said Mike Nolan, KPMG International's global leader for risk consulting. "But companies can transform these challenges into a competitive advantage. All of their competitors are in the same boat, but very few are going to take advantage of the regulatory onslaught to become more competitive. The companies that do will be in a strong position to turn regulatory risk into an advantage."
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Title Annotation:ECONOMY & GROWTH
Author:Heffes, Ellen M.
Publication:Financial Executive
Date:Jul 1, 2013
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