FERMA European Risk Manager Survey Report 2022

The Federation of European Risk Management Associations (FERMA) has recently published the results of the 2022 European Risk Manager Survey.

 

FERMA’s publication of the 2020 edition took place close to the height of the pandemic. The exceptional circumstances that prevailed then have evolved, even though these still remain with us. The pandemic is not yet under control, and we still feel its impact on economies. Russia is continuing its war against Ukraine and inflation is rising. The results of the 2022 survey show that risk discussions at board/top management levels are more frequent, and the risk manager’s involvement in corporate strategy and sustainability has consolidated. Resilience is more than ever a priority for the top management, and the role of the risk manager is evolving as a consequence. Risk managers are now taking additional responsibilities, especially for business continuity and crisis management.
 

In terms of transition to a digital and green Europe, collaboration between risk management and IT and information security has consolidated over the past few years and is now a normal aspect of their work. Risk managers are also increasingly involved in sustainability matters and environmental, social and governance (ESG) related risks. The results of the FERMA 2022 survey show the transition of the risk manager ever more towards the role of the risk conductor for the organization, consolidating information from other risk-related functions to give a clear and comprehensive view to the top management.


Since 2018 and, particularly, during these last two years, multiple events have disrupted the European risk landscape: the pandemic, war and political uncertainties, economic developments, technological changes and growing environmental pressures, among them. Consciousness of risk has increased since something that seemed unlikely has now happened. So, risk is inside all topics, and it was always a topic.

 

The current economic and political climate heightens the importance of the top concerns of risk managers:

  1. There has been a spectacular increase in cyberattacks exploiting the increased number of digital connections during the Covid-19 lockdowns and the potential vulnerabilities from people working from home, as well as the increased digitalization of operations.
  2. Supply chain or distribution failure draws attention to vulnerabilities in the supply chain. The Covid-19 crisis accelerated and magnified existing problems in the supply chain due to restrictions at borders which slowed or even halted the flow of raw materials and finished goods, thereby disrupting manufacturing. Due to the pandemic, many businesses stopped their operations or significantly reduced activity. The blocking of the Suez Canal by a ship that got stuck in transit also demonstrated the vulnerability and dependence of supply chains.
  3. Geopolitical uncertainties are at a high level with the Ukrainian war impacting not only the European market but also the global market. Moreover, the sanctions imposed by governments against Russia are affecting the political scene and the economy.
  4. Uncertain economic growth is still prominent considering the many crises we have been through, and the current concerns about inflation and rising costs.
  5. Over-regulation takes into account the new regulations that are expected to emerge notably in the field of ESG with the European Green Deal and in the digital transformation.

 

Organizations are now reassessing the potential impact on their strategy of risks that were previously considered on a long horizon or of low probability. Organizational resilience has never been higher on the agenda of companies, and risk managers can enhance their role as business partners and take a greater part in strategic level discussions than ever before.

 

How can BDO help?

BDO can assist organizations by providing a range of services designed to provide greater clarity on Governance, Risk and Control Frameworks, as well as to support best practice in this area.

BDO’s Risk Advisory Services include:

 

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