In Control - Realising return from risk management

May 2008

In 2007, a team from PricewaterhouseCoopers set out to interview finance directors about their approach to risk management and how effectively it is embedded into their overall strategy. We found that despite considerable investment in improving the management of risk, many companies are still finding it difficult to gain business buy-in for risk management as an integral element of decision making.

This document examines the following areas where companies are struggling to deliver the fuller risk management agenda:

• Aligning performance and risk, particularly articulating a meaningful risk strategy and risk appetite that ensures potential gains, threats and compliance are viewed collectively when making decisions.
• Broadening the focus of risk management and embedding and integrating the corporate risk appetite and risk strategy into the culture of the business.
• Ensuring any emerging change in the nature of risk is adequately identified, managed, communicated and measured throughout the business.
• Evolving the "risk function" beyond compliance into a more strategic function that shapes corporate objectives rather than drags corporate performance.