Risk Management, An Opportunity For Business Performance

Against a backdrop of changing global economic conditions, companies are continually seeking new sources of growth. As part of this approach, some lead transformation projects while others invest in innovation or make a choice to grow internationally. Whatever their strategy, companies are exposed to many risks. “Transformation projects are certainly essential for companies to differentiate themselves in an increasingly competitive environment, but often require them to make large investments,” explains Sebastian Rimbert, Managing Partner Ernst & Young.An approach that induces strategic risks that may, for example, be linked to the choice of a host country or the activity to be developed. “

Technological risks are worrying

Among the risks that are considered to be of concern by the companies that take part in these approaches, those related to technologies come at the top of the list. Technologies play a vital role in the strategic planning of the vast majority of companies, whether for the development of new products and services or operational efficiency. According to the 2015 edition of emerging risks by Chubb (formerly ACE), the technological risk has become the one that mobilizes the most time and resources of the risk manager. He is also the one who could have the most significant financial impact on their business.

Regulatory Risks And Compliance Risks Challenging To Grasp

The international development of companies is also not without consequences on their exposure to regulatory risks and compliance risks. While highly regulated industries such as financial services and energy face extreme regulatory challenges, no company is immune to these risks. According to the Chub barometer, regulatory risks and compliance risks are indeed a concern for 32% of French business leaders. “As companies develop internationally, the legal and regulatory poses a major risk,” continues Nadia Cote.54% of the companies questioned believe that managers do not fully control the governance and compliance of all the countries in which they exercise responsibility. “Finally, French companies are also increasingly sensitive to geopolitical risks, risks of regime changes, property confiscations or protectionism. Regarding geopolitical risks, they are more concerned about the termination of operating licenses, concessions or contracts by foreign governments.

Risks related to human resources are developing

At the same time, companies are also increasingly concerned about “human” risks, including the risks to people, those caused by people, and the risks of talent. “Companies are paying more and more attention to protecting their employees from, for example, terrorist risks,” continues Nadia Cote. 84% of French companies surveyed in our barometer state that recent events (such as terrorist attacks, political violence, and pandemics) require them to review their travel and security policies. ” talent risk management is one of the best processes to mitigate this type of risk.

When risk becomes an opportunity to gain performance

Often apprehended in a defensive approach, risk management also serves the development and production of the company. According to an Ernst & Young study (conducted in 2012), 20% of the most mature risk management companies have indeed generated three times higher over the past five years than the 20% of the least sophisticated companies in this area. To achieve this, companies must nevertheless transform specific risks into opportunities.