The global financial crisis should have prompted financial institutions to focus on risk management, but according to new research sponsored by SimCorp, risk management has lost status within organisations and is not being treated as seriously as it should be.
The research has been undertaken by the recently-established SimCorp StrategyLab in cooperation with The Nielsen Company and suggests that the number of risk managers actually reporting to boards has been dropping.
The research revealed that since 2007, the number of organisations that had the risk management function reporting to the board of directors had dropped by 5 per cent, from 36 per cent to 31 per cent.
The director of SimCorp StrategyLab, professor Ingo Walter, said much had been learned about the failures of risk management during the current financial crisis and it was therefore disturbing that the survey had indicated some institutions were moving in the wrong direction.
He said it was disturbing that the findings of the survey suggested that some of the needed reforms and the degree of urgency about the resources needed for effective risk management and its role in overall senior management and strategy development were not perceived by the respondents as compelling.
SimCorp Asia managing director Peter Hill said he believed the SimCorp StrategyLab research would resonate with the trustees of Australian superannuation funds.
Explaining the foundation of SimCorp StrategyLab, Hill said it had been founded as a private and independent research institution with the aim of identifying ways to mitigate risk, reduce cost and enable growth in the global investment management industry.
