Ninety per cent of corporate directors think value creation should be a key focus of risk management, according to a Deloitte survey on corporate attitudes to risk.

But the survey of 300 c-level or board representatives excluding chief risk officers (CROs) across the Americas, EMEA and Asia/Pacific regions found that only one-fifth are taking action to implement risk strategies that create value. The findings of the study suggest that CROs should be taking a more strategic role, including setting the strategic direction of the company and aligning risk management strategies accordingly.

Three key themes came out of Deloitte's results:

1. Companies need to build closer alignment between value creation and risk: Organizations whose risk management philosophies and programs focus on value creation cite a range of areas where their actions are delivering significant benefits. These areas include customer loyalty, increasing operational resilience, improving cost effectiveness, and identifying and exploiting new business opportunities.
2. Companies need to do more to establish and optimize the role of the CRO: A majority of business leaders surveyed – 63 per cent – state that the firms they represent have a full-time CRO, with an additional 24 per cent stating they believe the role is being performed by another executive. However, research suggests that organizations may not be defining this critical role accurately, or benefiting from it fully.
3. Companies must forge responses to their most strategic risks and opportunities: Companies say they are focusing on a wide array of both emerging and longstanding strategic and tactical risks – but are these the right issues? With only 17 per cent of respondents citing cybersecurity and 9 per cent viewing geopolitical issues in the top three risks to their business, it is crucial that organizations do not lose sight of these risks and opportunities at the perimeter.

Deloitte's Sam Balaji warns corporate executives against feeling overconfident when it comes to their risk management strategies: “Business leaders should recalibrate and fortify their risk management programs to ensure strong alignment with business strategy, linking them to value creation and differentiation. Given the pace of change and these findings, it is clear that a healthy dose of self-reflection accompanied by concrete action is imperative to harness the power of risk management to achieve market leadership.”

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CTMfile take: Value creation permeates all corporate activities these days so it seems logical that risk management strategies should also be geared towards it - not sure about 'main focus' though. From a treasury point of view, risk management is mainly about mitigating exposures, whether to volatile currencies, uncertain markets or supply chain weaknesses. What are the treasury opportunities for focusing on value creation through risk management?