Maryland –January 22, 2014– Despite a slowly improving economy, finance
executives haven’t relaxed when it comes to risk management because a new set
of threats is keeping them up at night, according to a report released today by
the Association for Financial Professionals (AFP).
The 2014 AFP Risk
Survey, produced in conjunction with Oliver Wyman, found
that U.S. corporations expect earnings uncertainty to continue this year and they
are focused on how potential political/regulatory risks (48%) and competition
(48%) could potentially destabilize corporate performance.
global markets, national economies and industries search for innovative and
efficient solutions to fundamental issues and new technologies disrupt the
status quo, there is an unprecedented opportunity for companies to create
long-term shareholder value,” says Alex Wittenberg, a partner at Oliver Wyman
and head of the firm’s Global Risk Center. “We believe the firms that take a
more proactive approach to bringing their risk analysis and financial
forecasting capabilities into alignment will be able to realize strategic
rewards that will clearly differentiate them from their competitors.”
expect uncertainty to continue.
Among respondents, 84 percent report that their organizations are exposed to
the same or more uncertainty today than they were three years ago.
risk concerns have shifted.
Focus is on competitors and customers rather than macro-economic factors:
Financial factors such as credit,
liquidity, interest rate, currency, and FX risk (26 percent)
External factors such as country risk,
regulatory risk, natural disaster (25 percent)
Business operations, such as supply
chain disruptions, production interruptions, litigation, labor outsourcing, and
IT (23 percent)
the highest management levels, risk matters.
Over 90 percent of financial professionals note that risk management is either
“very important” or “important” at the executive management level.
companies foster cooperation between FP&A and risk management.
Cooperation between these functions improves the quality of inputs from across
business units, providing the executive team with better business insights for
strategic planning and forecasting.
finding that companies have better insight into risk when they coordinate risk
management with the financial planning and analysis function," says Jim
Kaitz, AFP's president and CEO. "A good place to start is by engaging the
CFO in a discussion about how the company manages risk now and what the risk
management goals are."
In October 2013, AFP surveyed its senior level corporate
practitioner membership and prospects with job titles of CFO, treasurer,
controller, vice president of finance and assistant treasurer about uncertainty
and the way their organizations manage risk, receiving 554 responses. This is the third instalment in a
three-year series of surveys by AFP and Oliver Wyman to study the business risk
landscape and impact companies and their treasury and finance function. Download complete
findings on www.afponline.org/risksurvey
With offices in 50+ cities across 25 countries, Oliver
Wyman is global leader in management consulting that combines deep industry
knowledge with specialized expertise in strategy, operations, risk management,
and organization transformation. Oliver Wyman is a wholly owned subsidiary of
Marsh & McLennan Companies [NYSE: MMC]. Follow Oliver Wyman on Twitter @OliverWyman.
Headquartered outside Washington, D.C., the Association for Financial Professionals
(AFP) is the professional society that represents finance executives globally.
AFP established and administers the Certified Treasury Professional and
Certified Corporate FP&A Professional credentials, which set standards of
excellence in finance. The quarterly AFP Corporate Cash Indicators serve as a
bellwether of economic growth. The AFP Annual Conference is the largest
networking event for corporate finance professionals in the world.
Association for Financial Professionals, Certified Treasury Professional, and
Certified Corporate Financial Planning & Analysis Professional are
registered trademarks of the Association for Financial Professionals.© 2013
Association for Financial Professionals, Inc. All Rights Reserved.
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