Closing the communication gap How institutional investors are building risk-aware cultures David Line Managing Editor, Industry & Management Research May 2013 This presentation contains select findings only from the Closing the Communication Gap report To view the full report please visit: http://www.managementthinking.eiu.com/closing-communication-gap.html Core questions What quality of information does the business receive from the risk function? How effectively does the risk function communicate with other areas of the business? Is the risk function is well understood? How well are managers and staff are incentivised to achieve risk objectives? How these issues compare globally? Research methodology Survey demographics Survey demographics Key findings Risk awareness has changed dramatically Reputation is as big a concern as market risk Risk priorities not always align 10 Risk priorities not always align 11 Internal risk information is not always good 12 Confusion over the role of the risk function 13 Europe has the biggest communication gap 14 …and pays for it 15 Risk committees provide the bedrock for more cohesive risk frameworks 16 CROs are increasingly on executive boards… 17 But incentives to meet risk targets are sporadic 18 10 Paying for risk objectives makes risk management pay… 19 11 …as does better communication 20 12 Whistleblowers unite 21 Closing the communication gap Thank you David Line Managing Editor, Industry & Management Research May 2013 22 [...]...3 Risk priorities do not always align 11 4 Internal risk information is not always good 12 5 Confusion over the role of the risk function 13 6 Europe has the biggest communication gap 14 …and pays for it 15 7 Risk committees provide the bedrock for more cohesive risk frameworks 16 8 CROs are increasingly on executive boards… 17 9 But incentives to meet risk targets are sporadic 18 10 Paying for risk. .. frameworks 16 8 CROs are increasingly on executive boards… 17 9 But incentives to meet risk targets are sporadic 18 10 Paying for risk objectives makes risk management pay… 19 11 …as does better communication 20 12 Whistleblowers unite 21 Closing the communication gap Thank you David Line Managing Editor, Industry & Management Research May 2013 22 ... does the business receive from the risk function? How effectively does the risk function communicate with other areas of the business? Is the risk function is well understood? How well are managers... managers and staff are incentivised to achieve risk objectives? How these issues compare globally? Research methodology Survey demographics Survey demographics Key findings Risk awareness has changed... market risk Risk priorities not always align 10 Risk priorities not always align 11 Internal risk information is not always good 12 Confusion over the role of the risk function 13 Europe has the