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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
