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Financial Crisis Highlighting Benefits of Managing Risk, Cost Reduction and Effective Stakeholder Management
28th January 2009
Business Insurance Europe have has conducted a panel interview comprising of insurance and risk management executives on the impact of the credit crunch upon businesses. european-insurance-companies-view-on-business
Short-term needs for credit to fulfil operational obligations have been identified as being much greater than ever to ensure future sustainability of businesses. Due to instances where companies have been defaulting with regard to interest payments, there has been a shift in focus on credit management for both suppliers and customers. Consequently, supply chain risk management in this respect was identified as a complex and challenging objective.
Companies are emphasising operational cost-reduction within their budgeting forecasts and the need to ensure that investment in basic risk management is included rather than excluded for the next financial year.
The need for businesses to effectively demonstrate their corporate governance credentials is highlighted to meet their stakeholder requirements and hence, ease access to the acquisition of capital necessary for the future sustainability of their organisations. Services such as Corporate Social Responsibility (CSR) report assurance can support organisations in this regard.
The panel believes risk management is being repositioned more than just fulfilling a control and audit function; it is evolving into enterprise risk management allowing the opportunity to add true tangible value for organisations and businesses alike. The conclusion suggests the current climate presents a huge opportunity for risk management to support businesses to achieve organisational resilience and help them to further strengthen their operations.
Services such as business continuity management, supply chain management and CSR can support organisations in addressing the risks highlighted by the report. For any questions relating to this blog, please contact the author at raz.chaudary@lrqa.com