Download Finance`s Role in Operational Risk Management

Finance’s Role in
Operational Risk Management:
CFO Research on Building a Resilient Company
January 2017
Survey Respondents
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
Survey Respondents’ Organizations
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
CFOs’ Experience with Specific Operational Risk Events
65%
66%
Equipment Failure
Data Breach/Cyber Attack
69%
59%
Natural Disaster
71%
Geopolitical Disruption
Supply Chain
Disruption/Failure
Fire/Explosion
52%
49%
42%
Harmed Other Companies
in My Industry
Caused Harm to My
Company
56%
41%
44%
37%
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
CFOs’ Level of Preparedness for
Specific Operational Risk Events
Equipment Failure
34%
Natural Disaster
33%
Fire/Explosion
Supply Chain
Disruption/Failure
Data Breach/Cyber Attack
Geopolitical Disruption
30%
21%
24%
62%
60%
57%
Very Well Prepared to
Recover
55%
Have Modeled Worst-Case
Scenario
54%
20%
31%
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
Impacts of a Loss Event
Damage to customer service/relationships
47%
Threat to employees’ health and wellbeing
43%
Harm to my company’s brand or reputation
39%
Production or service delivery interruption…
36%
Unplanned cost increases
24%
Compliance problems
22%
Reduction in our market share
Other
14%
1%
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
Connecting Operational Risk with
Revenue/Earnings Volatility
68%
I am concerned that revenues or
earnings will become more
vulnerable to operational risk
over the next two years
58%
The need to manage operational
risks will make it more difficult to
meet revenue and earnings
targets over the next two years
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
Connecting Operational Risk with
Revenue/Earnings Volatility
86%
A risk management program for
operational risk can help reduce
revenue/earnings volatility
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
The Most Important Protection from
Operational Risk over the Next Two Years
Focusing more on preventing losses from
operational risks
Aligning management of operational risk
with other types of risk
41%
31%
Controlling the costs of insurance coverage
23%
Having more detailed physical and
engineering data on facilities/equipment
Investing more in protection against hacking
or cyber attacks
Strengthening our insurance coverage
22%
20%
14%
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
Loss Prevention/Mitigation Is …
Less important than Insurance coverage
6%
More
important
than insurance
coverage
38%
Equally as
important as
insurance
coverage
56%
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing
Tension Between What CFOs Say Is Needed
and What Has Actually Been Done
46%
86%
Companies will need to
be more resilient
in the future
My company has
developed and tested formal lossrecovery plans
Source: Finance’s Role in Operational Risk Management - CFO Research on Building a Resilient Company
© CFO Publishing