Risk resiliency—the ability to deliver growth and performance in varied business climates with confidence and clarity—has become a business imperative in the wake of the financial crisis. The financial crisis clearly exposed a short-coming in current risk management practices—too many companies took on excessive risk with too little regard for long term performance. To achieve resiliency, companies must revisit traditional approaches to risk management while aligning risks and performance to achieve sustainable strategic and operational results.
Now, more than ever, risk management is in the spotlight for reform. The financial crisis has confirmed what management has often suspected - that traditional siloed approaches to risk management are often ineffective, redundant and costly to maintain. While compliance remains a core function, the broader practice of risk management must be revisited to ensure it keeps pace with business goals and performance incentives. Reforms demanded by stakeholders, directors, rating agencies and investors will require increased discipline, clarity and transparency as stakeholders seek a more reliable linkage between risk and resulting performance.PwC's analysis shows how to achieve resiliency by creating accountability and incentives for integrating risk and performance management.
Related insights links: