Richard Chambers blog, 15 February 2021
One of the persistent challenges internal auditors face is finding alignment with stakeholders on the risks that most threaten their organizations.
A recently published report from Protiviti and the North Carolina State University ERM Initiative helps shed light on that alignment (or misalignment). Executive Perspectives on Top Risks: Key Issues Being Discussed in the Boardroom and C-suite (PDF) examines risks facing organizations in 2021 and beyond as seen by a wide variety of respondents, from board members to every position that makes up the C-suite, including CAEs.
One of the report’s key observations offers an important insight that all risk management players should understand and take to heart:
“The results reflect how different roles assess risks differently in different environments and economic periods, and emphasize the critical importance of bringing numerous stakeholder viewpoints to bear in risk discussions. It is of paramount importance that both the board and the management team engage in dialogue regarding the critical enterprise risks, given the different perspectives each brings to the table and the potential for a lack of consensus. Without clarity of focus, the executive team may not be aligned with the board on what the top risks are. Worse, they may not be appropriately addressing the most important risks facing the organization, thereby leaving the organization potentially vulnerable to certain risk events.”