LOS ANGELES—Executives see risk management as a significant anddesired role in an organization, but a study shows the role hasn'tyet tapped into its full potential to grow enterprises andstrengthen their bottom lines.

The 10th annual Excellence in Risk Management survey, a jointeffort by Marsh and the Risk and Insurance Management Society(RIMS), surveyed more than 1,200 risk managers, C-suite members,and others involved in risk functions in 2013.

While about half of all respondents say that risk management isincluded in executive activities in order to identify risks withincorporate strategic plans, only 20 percent of executives and 15percent of risk managers say this opportunity is actually extendedor taken.

“This general move towards risk professionals adding more valueto organization's strategic decisions is encouraging,” said CarolFox, director of the strategic and enterprise risk practice atRIMS. “Yet, there is still much room for growth, and gaps remainbetween what senior leaders and risk professionals expect from therisk function in its delivery of strategic value.”

During a RIMS press conference at the group's annual conferencein Los Angeles, Fox and Yvette Connor, Marsh's managing director ofglobal RM and 3D national practice leader, discussed how aligningdata and analysis of risk (key risk indicators, or KRIs) withbusiness knowledge (key performance indicators, or KPIs), benefitsboth the risk manager's position and the C-suite.

Risk professionals and senior leaders ranked data and analysisas the number one and three focus areas, respectively, fordeveloping risk management capabilities in 2013, and 74 percentanswered that their organizations need to dig deeper into data, as75 percent don't aggregate portfolio risks.

The speakers said the C-Suite and risk executives need to agreehow the risk function can drive improvements in financing strategy,which will positively affect cash flow and profitability.

Most C-suite and risk professionals said the best use of data isto inform decisions about specific risks. However, risk managersplaced insurance program optimization as their role's second-mostimportant purpose, while the C-suite said they think riskprofessionals should define the company's risk bearing capacity andinform overall business strategy.

To close this disconnect, Connors said, risk managers must focuson growth, value, and profitability- and what they mean infinancial terms- in order to be relevant to any of their company'sgrowth strategies. She suggests taking the initiative to work on aproject, for example, working with a firm's business unit as it isconsidering a new property transaction.

The CEO may need help with risk modeling on the project budget,or the risk manager's expertise may help him or her find volatilitysurrounding a revenue or expense- for example, a property viewed asa budget find could be located in a flood zone, potentiallyincurring business interruption costs that far outweigh money savedon the purchase.

“There is a significant opportunity for the riskmanagement function to work in tandem with the other pieces of anorganization to develop a living, breathing view of the riskportfolio,” she said. You don't have to own the risk, but you canbe a valuable facilitator [of an opportunity]. When you get theright people in the same room, you can help move the organizationforward.”

Fox gave an example of an energy company whose risk departmentdiscovered that its experts on high-energy wiring were retiring inthree to four years, meaning the company only had a small window oftime to continue offering the service.

Overall, risk managers can gain understanding of KPIs, such asnew customer acquisition turnover and corporate profitability, bydoing what they do best: by talking to the people in customerservice, strategic planners, human resources and other siloed rolesin the organization.