NU Online News Service, July 3, 10:14 a.m. EDT

Increasingly, more CEOs and CFOs are taking charge of their companies' risk-management duties, according to a Deloitte & Touche and Forbes Insights survey–and the majority of those companies say they plan to implement changes designed to raise the profile of risk management throughout their organization.

According to the survey, 26 percent of respondents say the primary responsibility for overall risk management belongs to the chief executive officer (CEO), followed by 23 percent who said the chief financial officer (CFO) or treasurer.

The chief risk officer (CRO) and head of risk, surprisingly, came in at third.

Deloitte teamed with Forbes Insights to poll 192 insurance executives, mostly those holding the title of director or vice president, working for consumer and industrial products, life sciences, health care, technology, telecommunications, and media companies in the U.S. that make between $1 billion to greater than $10 billion in revenue.

Deloitte writes that it is essential to spread risk awareness equally throughout the whole organization so that all employees feel accountable, a task for which the CEO is well-suited.

“There is always a concern that if you set up a large ERM team, they somehow own risk. It can't work that way. People that manage the day-to-day business need to own risk,” says Rick Kulevich, senior director of ethics and compliance at business-technology provider CDW, in the Deloitte report.

As for raising the profile of risk management, 91 percent of the survey respondents say their companies plan to reorganize and re-prioritize their approach to risk management in some form within the next three years, with 55 percent planning to implement changes over the next 12 months.

Most of these changes are being driven by economic uncertainty: almost 80 percent of survey respondents stated that market volatility over the past three years has affected their approach to managing and responding to risk.

“When the financial world collapsed, it resulted in less tolerance for volatility, and less tolerance for surprises. ERM is an effective way to help address those concerns and bring consistency to the risk management process,” Kulevich says.

“More and more companies are planning to pay attention to risk management. Economic volatility has much to do with it,” adds William Keevan, senior advisor at Chess Consulting LLC.

Popular responses to the pervasive economic crisis include reorganizing risk management processes (39 percent), providing additional staff training (37 percent), incorporating new technology (31 percent) and integrating it into strategic planning (28 percent).

Effective ERM is in giving individuals ownership of risk, which according to Deloitte is in turn dependent on company-wide awareness. Twenty eight percent of survey respondents said their main challenge is making people aware of what they need to do concerning risk, more so than challenges posed by available skills, technology or corporate culture.

Special Reports /

CEOs Owning Risk as Economy Raises Profile of Risk Management

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