Skip to content Skip to footer
Search

Loading Results

More to do to manage business risks effectively

19 July, 2022

  • Organisations’ risk management and broader resilience capabilities need to quickly adapt to support business agility and to contribute proactive, robust and timely risk insights for decision-making.
  • Opportunity to take advantage of data availability and risk tools to provide a panoramic view of the rapidly evolving risk landscape.

  • Investment in risk management technology ramping up, but more to be done to get value. 

  • Embedding risk into decision making key to keeping up with the pace of change.

  • Double down on top risks and enhance risk appetite.
A person using a tablet

More investment is needed to enable risk informed decision making; Irish businesses are significantly increasing their spend on risk management technology to keep up with the speed of digital transformation, but more value to be got; More to do to engage Risk early in decision making; Investing in risk culture is critical.  

These are some of the key findings from PwC’s 2022 Risk Survey seeking the views of over 3,500 global and Irish business, risk and compliance leaders on evolving risk management practices and related challenges. This press release deals with the Irish findings. 

In this turbulent business environment, many executives are looking to  revise and adapt their strategies and operating models at a rapid pace. They need to be able to  make confident decisions in pursuit of their strategy that are informed by a panoramic view of risk.

Risk management capabilities provide the greatest value to Board members and business leaders when they are embedded within the organisation’s strategic planning and decision-making processes.

Key points in the survey included:

The top risks, according to the survey, are geopolitical, talent management, supply chain issues, regulatory compliance, cyber threats, ESG and external events such as inflation.

Globally, the survey found that the top 10% of respondents (those realising benefits from strategic risk management) expect faster revenue growth and better outcomes. They are twice as likely to anticipate revenue growth greater than 10%.

More investment needed to enable risk-informed decision making to keep pace with global counterparts

Despite the risks to businesses and technology, the survey suggests that organisations may not be adapting fast enough. Risk-based decision-making needs to be enabled through integrated processes, workforce practices and systems. Six out of ten (60%) Irish respondents face challenges due to the lack of a coordinated approach to business risk (Global: 69%).  

In response, the survey found that roughly two-thirds of Irish businesses are increasing their spend on risk management workforce practices and capabilities, but less than their global counterparts (75%). This includes the addition of technology and digital capabilities to the risk function, reorganising the structure of risk functions and redefining the balance of resources. 

However, just a fifth (21%) of Irish risk leaders are currently realising benefits from a governance, risk and compliance system (Global:23%) that is holistic and integrated.

Richard Day, Risk Assurance Leader, PwC Ireland, said: “With the aftermath of a pandemic and now a war, sanctions and economic and supply chain disturbances, the world is very different to what it was a year ago. So has the risk environment completely changed for organisations. Risk management capabilities need to adapt to support agility and to contribute proactive, robust and timely risk insights for business decision-making. Knowing your risks and tackling them head-on can make the difference between companies that grow and those that don’t.”

“Based on the survey data and what global peers are doing, there is further scope for Irish businesses to invest in risk governance structures, coordinate business risk management practices and deploy technology over the medium-term to facilitate risk-informed decision-making.”

Investment in risk management technology ramping up, but more to be done to get value 

Two-thirds (66%) of Irish respondents stated that they face significant management challenges due to technology systems that don’t work together (Global: 75%). Leveraging risk technology and data analytics is important to support real-time risk detection. 

In response, over three-quarters (78%) of Irish risk leaders confirmed that they are increasing their spend on risk management technology (Global: 65%). Of this, 36% are increasing their spend by more than 11% (Global: 22%). This increased expenditure is primarily focused on data analytics and automation.  

75% of Irish respondents stated that their risk functions lacked the required skill sets (Global: 70%).

However, there is more to be done by Irish businesses to ensure that they derive value from their significant medium-to-long-term investments in risk management technology. For example, just 36% of Irish risk leaders stated that they are only seeing tangible returns now from previous such spending (Global: 50%).  

More to do to engage risk early in decision making   

Business leaders said it’s tough to keep up with the pace of change. With the help of technology, strategic decisions need to be revisited frequently. 75% of Irish business leaders reported that keeping up with the speed of digital and other transformations is a significant challenge to managing risk (Global: 79%). 

Positively, 85% of Irish respondents were confident their risk functions could increase organisational resilience (Global: 91%). However, less than four out of ten (39%) business leaders confirmed that they are reaping the benefits of consulting risk professionals early in their transformation programs so there is an undoubted opportunity for earlier engagement.

Andy Banks, Risk Assurance Partner, PwC Ireland, said:  “The organisations that have stood out from the pack in the past two years have not just managed risks, they’ve taken on risks, with confidence. These organisations have an agility advantage. They have the right resources engaged in making risk-informed decisions at the right time. Good analysis and modeling is a key component of proactive risk management, as is including risk management capabilities at the start of new projects and other strategic initiatives. These organisations are reaping the benefits of consulting with risk professionals early in their programmes.”

Double down efforts on top risks and enhance risk appetite

Just over half (54%) of Irish risk leaders confirmed that they are investing in risk culture including considering behavioural risk (Global: 56%). Only a fifth (21%) reported that they are  now realising the benefits of resetting their organisation’s risk appetite (Global: 22%). 

For the top risks facing an organisation including ESG, risk management capabilities should go beyond the traditional risk analysis. Risk owners need to understand the interdependencies between the risks driving the organisation’s risk profile and provide clarity on what is an appropriate risk appetite for the organisation. Having an appropriate risk culture is key enabler to this. 

Fiona Gaskin, ESG Risk Leader, concluded: “One of the biggest risks of our generation is climate change. This is often a multi-facted risk which can amplify other risks with the impacts far reaching. For example, it can quickly pose huge operational, financial and reputational risk. As such an organisation’s risk appetite and risk culture need to be sufficiently developed to identify climate change risks and opportunities and take the required action to embed a strategy setting the journey towards net zero. Not only will an organisation’s future existence depend on it but so will its reputation.”

Notes to editors

About the survey 

The PwC survey of 3,584 business and risk, audit and compliance executives was conducted in Spring 2022 and included 33 business and risk leaders in Ireland. 58% of respondents were in large companies ($1 billion and above in revenues) including in: Western Europe including Ireland (30%), N. America (29%), Asia Pacific (21%), Latin America (12%), CEE (3%), Middle East (3%) and Africa (3%).

PwC’s 2022 Global Risk Survey highlights five actions to consider to drive risk management capabilities forward:

  1. Ensure that you have the right risk management foundation
  2. Adopt a data-enabled and integrated approach to risk management
  3. Integrate risk management into strategy and decision-making 
  4. Take a panoramic view of risk
  5. Develop risk appetite and a risk-aware culture

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We're a network of firms in 156 countries with over 295,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at pwc.com.

PwC refers to the PwC network or one or more of its member firms or both, each of which is a separate legal entity. Please see pwc.com/structure for further details.

© 2022 PwC. All rights reserved

Contact us

Johanna Dehaene

Corporate Communications, PwC Ireland (Republic of)

Follow PwC Ireland