Risk Management Watch: Firms Spending to Shore up Risk Protocols
Perceived risk management failings are driving a spending spree, according to a recent survey from business model advisers SAS. The survey, which polled 316 financial service firm board members, shows that nearly 60% of firms are spending cash to shore up their risk management strategies amid ongoing financial uncertainty. Moreover, the study finds that 70% of respondents believe “losses stemming from the credit crisis were largely due to failures to address risk management issues.” According to Alastair Sim, Global Risk Director for SAS, “This survey is evidence that the risk management needs of financial institutions are evolving to go beyond regulatory risk and must break down traditional risk silos to drive toward a firm-wide risk view.”
The global financial crisis is dramatically reshaping the financial services industry in the U.S. and around the world. Today, firms are struggling to adjust to the unfolding global economic environment. Corporate boards are facing unparalleled levels of business complexity, a constantly changing political landscape, new regulations and mounting shareholder demands. As a result, executive recruiting firm, A.E. Feldman, says understanding and managing enterprise-wide risk has become a top priority. The firm reports that risk management jobs are evolving to better manage initiatives to ensure that business objectives are met, losses are minimized, business processes are improved and greater accountability is achieved. Looking ahead, A.E. Feldman adds that senior communications and marketing professionals will also become hot commodities as firms reposition and rebrand themselves.
Focus on ERM
Facing the current financial crisis, business leaders are gravitating towards enterprise risk management (ERM) in assessing a firm’s strategic objectives and risk management. According to SAS, “Enterprise risk management entails more than balancing risk and reward, and goes beyond regulatory compliance. It embeds risk management into everyday processes at all levels of the organization in order to truly drive business evolution.”
Now, in anticipation of closer scrutiny from regulators, many institutions are revisiting their risk management practices, according to SAS. TowerGroup Analyst Rodney Nelsestuen agrees, saying, “Enterprise risk management has taken on new importance as stockholders, boards of directors and regulators demand better, more timely analysis of risk and a deeper understanding of how the institution is impacted by the dynamic risk environment of a global financial community.” More than half of those polled in the SAS survey, 59%, say the credit crisis has prompted them to scrutinize their risk management practices in greater detail and they are currently working with consultants to produce new enterprise risk management protocols, in an attempt to minimize any future losses.
A.E. Feldman adds that financial and risk professionals with expertise in processes for assessing credit and counterparty risk and liquidity risk are in demand along with professionals with experience in restructuring and litigation support that can provide advice on how to respond to the evolving market conditions and subsequent regulatory changes.
Facing a difficult economic climate, A.E. Feldman - a leading recruiter in the areas of finance and risk management as well as accounting, law, project & infrastructure finance, data center efficiency, energy and clean technologies - invites firms to contact its President, Mitch Feldman, its CEO, Carol Schwam, and its highly specialized team of executive recruiters directly to open up a dialogue about the array of issues they face and those they anticipate in the future. Job seekers are also encouraged to inquire about existing and future job opportunities. According to Mitch Feldman, “Our lines of communication are open.” Contact Mitch Feldman, and the firm’s expert recruiting teams here.
