BETHESDA, Md., Jan. 22, 2014 /PRNewswire/ -- Despite a
slowly improving economy, finance executives haven't relaxed when
it comes to risk management because a new set of threats is keeping
them up at night, according to a report released today by the
Association for Financial Professionals (AFP).
The 2014 AFP Risk Survey, produced in conjunction with Oliver
Wyman, found that U.S. corporations expect earnings uncertainty to
continue this year and they are focused on how potential
political/regulatory risks (48%) and competition (48%) could
potentially destabilize corporate performance.
"As global markets, national economies and industries search for
innovative and efficient solutions to fundamental issues and new
technologies disrupt the status quo, there is an unprecedented
opportunity for companies to create long-term shareholder value,"
says Alex Wittenberg, a partner at
Oliver Wyman and head of the firm's Global Risk Center. "We believe
the firms that take a more proactive approach to bringing their
risk analysis and financial forecasting capabilities into alignment
will be able to realize strategic rewards that will clearly
differentiate them from their competitors."
SURVEY HIGHLIGHTS
- Organizations expect uncertainty to continue.
Among respondents, 84 percent report that their organizations are
exposed to the same or more uncertainty today than they were three
years ago.
- Top risk concerns have shifted.
Focus is on competitors and customers rather than macro-economic
factors:
- Financial factors such as credit, liquidity, interest rate,
currency, and FX risk (26 percent)
- External factors such as country risk, regulatory risk, natural
disaster (25 percent)
- Business operations, such as supply chain disruptions,
production interruptions, litigation, labor outsourcing, and IT (23
percent)
- At the highest management levels, risk matters.
Over 90 percent of financial professionals note that risk
management is either "very important" or "important" at the
executive management level.
- Successful companies foster cooperation between FP&A and
risk management.
Cooperation between these functions improves the quality of inputs
from across business units, providing the executive team with
better business insights for strategic planning and
forecasting.
"We are finding that companies have better insight into risk
when they coordinate risk management with the financial planning
and analysis function," says Jim
Kaitz, AFP's president and CEO. "A good place to start is by
engaging the CFO in a discussion about how the company manages risk
now and what the risk management goals are."
ABOUT THE SURVEY
In October
2013, AFP surveyed its senior level corporate practitioner
membership and prospects with job titles of CFO, treasurer,
controller, vice president of finance and assistant treasurer about
uncertainty and the way their organizations manage risk, receiving
554 responses. This is the third installment in a three-year
series of surveys by AFP and Oliver Wyman to study the business
risk landscape and impact companies and their treasury and finance
function. Download complete findings on
www.afponline.org/risksurvey
ABOUT OLIVER WYMAN
With offices in 50+ cities across
25 countries, Oliver Wyman is global leader in management
consulting that combines deep industry knowledge with specialized
expertise in strategy, operations, risk management, and
organization transformation. Oliver Wyman is a wholly owned
subsidiary of Marsh & McLennan Companies [NYSE: MMC]. Follow
Oliver Wyman on Twitter @OliverWyman.
ABOUT AFP®
Headquartered outside Washington,
D.C., the Association for Financial Professionals (AFP) is
the professional society that represents finance executives
globally. AFP established and administers the Certified Treasury
Professional and Certified Corporate FP&A Professional
credentials, which set standards of excellence in finance. The
quarterly AFP Corporate Cash Indicators serve as a bellwether of
economic growth. The AFP Annual Conference is the largest
networking event for corporate finance professionals in the
world.
AFP, Association for Financial Professionals, Certified
Treasury Professional, and Certified Corporate Financial Planning
& Analysis Professional are registered trademarks of the
Association for Financial Professionals.
SOURCE Association for Financial Professionals