Organisations worldwide continue to face a rapidly changing business environment as a result of disruptive technologies, increasing competition and a shifting geopolitical landscape.
For companies listed in Hong Kong, regulatory changes are also prompting many leaders to implement or enhance their existing enterprise wide risk management programmes. One major development is Hong Kong’s corporate governance requirements that took effect on 1 January 2016, which marked a significant step in bringing the management of risk in line with other mature global markets. Following on from a similar 2015 survey focusing on the impact of these requirements, KPMG and The Hong Kong Institute of Chartered Secretaries (HKICS) conducted a survey in early 2017 of Hong Kong-based senior management to assess how well risk management has been embedded within businesses in Hong Kong.
The survey finds that the corporate governance requirements have had a positive impact on promoting greater oversight of risks facing the business, and that the management of risk is increasingly starting to form part of executive management and board sub-committee agendas.
However, the survey also reveals that many businesses have not fully integrated risk management into their decision making process, and that building up a holistic view of risk remains a key challenge. Furthermore, despite improving signs, a gap remains between financial services and non-financial services sector companies on their understanding and adoption of risk management programmes.
The key themes emerging from the survey indicate that businesses need to refocus their risk resources in a more effective manner, and adopt a holistic and integrated approach to managing risk.
The report discusses five key imperatives to help companies develop and implement an effective enterprise-wide risk management framework. A robust framework provides companies with a disciplined business tool to align strategy, processes, people, technology and knowledge to effectively navigate through a complex and rapidly changing environment, and to ultimately remain competitive and successful.
We would like to thank all the survey respondents for their participation and contribution to this initiative.
Partner, Head of Financial Risk Management
Ivan Tam FCIS FCS