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Reports reveal shifting attitudes toward risk management

In a recent survey, executives listed "reputation" as their biggest risk manag

Reputation and regulation are the top concerns for America's executives, according to the results of “Concerns About Risks Confronting Boards,” a new study from accounting, consulting and tax firm EisnerAmper

Reputation and regulation are the top concerns for America's executives, according to the results of “Concerns About Risks Confronting Boards,” a new study from accounting, consulting and tax firm EisnerAmper LLC.

Reputational risk
A variety of high-profile financial debacles over the past few years, including the BP oil disaster in the Gulf of Mexico, the collapse of MF Global and multi-billion-dollar losses at JPMorgan Chase, have led many executive boards to turn their attention toward reputation management, according to a CFO.com report on the study. Roughly two-thirds of survey respondents listed reputation as their top concern.

Despite concerns over potential PR disasters, customer satisfaction remains the No. 1 priority for a large portion of the executives who listed reputation as their biggest risk management concern. Product quality, liability and customer satisfaction garnered 39 percent of the vote from those respondents.

Regulatory concerns
Nearly three out of five survey respondents listed regulation and compliance as their top risk management concern, according to CFO.

“In the past, boards weren’t looking at risk as a big picture,” Steve Kreit, an audit partner with EisnerAmper, told the source. “When Sarbanes-Oxley came out, there was so much focus on compliance that they got caught up in regulations and small issues instead of taking a step back and looking at some of the big things.”

The results of the survey indicated that, as the economy begins to recover, executive boards will focus their hiring initiatives on expanding financial teams to support the CFO. While the 2011 EisnerAmper survey found that just 51 percent of boards had plans to hire and expand internally, this year's report indicates 71 percent have plans for growth.

New risk management approach
A separate study from Deloitte and Forbes indicated that 91 percent of executives have plans to revamp their approach to risk management in the coming year, ComplianceWeek reported. Some of the changes will simply involve boosting the profile of risk management within a company, but a significant portion of executives have more concrete plans. The survey revealed plans to reorganize risk management processes (39 percent), increase staff training (37 percent), implement new risk management technology (31 percent) and integrate risk management into strategic planning (28 percent).

In commenting on the report's findings, Henry Ristuccia, co-leader of Deloitte's governance and risk management services, said that the percentage of companies that are entirely rethinking their risk management strategies is a strong indication that the market is in turmoil, CW reported.

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