TLDR: Concerns remain that collaboration among the three lines of defense (business units, risk and compliance, and internal audit) in identifying, monitoring and effectively managing critical risks is still not deep enough.
As the world continues to become more digital and connected, businesses are investing heavily in technology to help better prepare their organization for success in the future. That’s why it shouldn’t be too surprising that a new study from PricewaterhouseCoopers (PwC) found that the number one concern of business executives is the potential of newly acquired IT systems to fail to deliver the expected benefits. Specifically, 53 percent of executives surveyed believe that a new IT investment not returning value to the company is a bigger risk than frequent and increasingly sophisticated cyber-attacks (47 percent), and a lack of trained employees to support new IT investments (34 percent). Overall, though, uncertainty is abundant in all business aspects as 75 percent of executives reported seeing increased risks for their organization this year. eWeek explains, “A majority of executives foresee continued significant market changes that will dramatically impact their companies, particularly in three key areas over the next 18 months—half of survey respondents pointed to rapidly changing customer needs, 56 percent noted increasing regulatory complexity, and 58 percent cited technological change and related IT risks. While improving competencies is an important step in closing capability gaps, survey respondents have made or are planning to make broader changes in the next 18 months, including 84 percent who plan to create a risk-aware culture, making risk management a priority for people at all levels of the organization. The survey found that 82 percent plan to develop processes to identify and monitor risks, including non-traditional risks, while 79 percent plan to conduct more non-financial audits to ensure that emerging threats like cyber-security are being addressed and 79 percent plan to integrate risk and business strategies, ensuring that risk is factored into all strategic decisions. “Executives are working to close the capability gaps they’ve identified, and agree that close collaboration between risk-related functions is vital to ensure a shared view of business risks across the enterprise,” Brian Schwartz, PwC’s US Risk Assurance Governance Risk and Compliance leader, said in a statement. “However, they may be missing a key issue—a sharp disconnect between top management and the risk and compliance functions. Not only are they disagreeing on the type and degree of key risks facing a company, but also about the organization’s capabilities…””
