Multinational corporations are facing increasingly diverse, complex and exotic risks, and may not have all the resources in place to manage them effectively, according to Aon's first global risk management survey.
More than half of the survey's 320 respondents said they were not prepared for the risk they rated as most worrying – damage to reputation. Business interruption was cited as the second key risk, where 70% of respondents reported that they were prepared, and 30% were not.
Survey responses suggest that third party liability risk concerns have arisen as a result of the encroachment of US-style litigiousness into other regions. And rounding out the top five risk concerns, based on the survey's results, are distribution or supply chain failure, and market environment. Lack of preparedness for these risks is reported at 37% and 65%, respectively.
Other top ten risk concerns rated by survey respondents are, in order, regulatory changes, failure to attract or retain staff, financial risk and physical damage. Mergers and acquisitions and disaster recovery plan failure are tied for tenth place.
America is the only region where technology failure and loss of data are cited as a major risk concern. Europe alone cites mergers/acquisitions/ restructuring, while Asia-Pacific is highly concerned with weather and natural disasters. Risk managers in the US tend to rely heavily on senior management intuition and experience to identify major risks, while other regions rely more on business unit registers.
The survey indicates that boards recognise the critical nature of risk management and are engaged in the review of risk issues. Respondents said identifying and understanding their risks is a top priority. Many planned to take a more enterprise-wide approach.
