What we need is a fundamental shift in mindset. Risk can no longer be the responsibility of compliance teams. Business leaders must boldly move risk out of the back-office and integrate it into the transformation process so that everyone in an organization – IT, audit and legal, front-line employees, supply chain managers, product and service innovators and the board – understands what it means to make decisions that mitigate the downside and capitalize on the upside risks.
An integrated approach to risk management builds trust. The 2018 EY Global Alumni survey of more than 9,000 EY people, past and present, emphasizes the emerging trust deficit between public institutions, corporations and the community. The erosion of trust poses a serious risk to long-term value – whether that’s because fewer consumers are prepared to purchase a product or because governments introduce more complex regulation.
If your organization is only beginning to rethink its approach to risk, you’re not alone. Less than 12% of the risk professionals polled by EY said their risk function was fully integrated with digital transformation projects. So, consider these five questions for further thought:
- What does your organization’s portfolio of risks – upside, downside and outside risks – look like?
- Is your portfolio fit for the future or fashioned on the past?
- How do you digitize risk monitoring as your organization undergoes transformation?
- How can you adapt your business model to place risk at the forefront of all strategic planning?
- How can you manage the “duality of growth” by moving to a new business model while keeping your existing business running?
In the Transformative Age, the biggest risk we can take is to do nothing.
Find out how to look at risk through a new lens.