Pandemic to boost risk management budgets and standing, finds IRM survey

More than half of risk managers (56%) surveyed by the Institute of Risk Management (IRM) expect an increase in their budgets as a result of Covid-19, with an overwhelming 96% believing the pandemic has strengthened the case for risk management within their business. Some 17% of respondents to the Risk Management Response to Covid-19 survey said their risk management budget could increase by more than 10% post-pandemic, and a further 41% expect an increase of up to 10%. “There will be a steady increase in spending on risk management going forward, organisations now being very much aware of the value of risk management competency and of organisational resilience,” said IRM chairman Ian Wright. He added that other risks – such as climate change, cyber risk and mental health issues – “must not be allowed to slip out of focus”. The survey of 170 global IRM members, conducted at the end of last year, also found that 28% of risk professionals expect changes to their roles as a result of Covid-19 to be permanent. Some 54% said they are now reporting to the board more than usual following the pandemic’s outbreak and 41% reported more frequent engagement with regulators. The poll found that 89% of respondents were satisfied or very satisfied with the response of their organisations’ business continuity and crisis management plans to the pandemic, while 9% were dissatisfied and 2% very dissatisfied. The IRM said firms quickly adapted their own working practices, adding that good leadership and communication were key enablers to help employees work remotely and safely. “Only a small proportion of firms had precisely anticipated and planned for pandemic risk, [but] more generic business continuity and crisis management plans generally worked well,” said Mr Wright. “Whatever the crisis that presents itself, a conscious combination of great leadership, great communications and great IT support helps firms both manage the risks and exploit the opportunities,” he said. The IRM said many risk managers enjoy flexibility and productivity from remote working, with its survey showing that 73% of respondents plan to work from home most of the time post-Covid-19. But it said questions remain about how to maintain company culture, manage workloads remotely and ensure mental wellbeing of staff. As companies start to recover from the shock of the pandemic, the survey found that companies are working to strengthen business continuity processes and organisational resilience, while shifting to risk-based decision-making. Respondents said building operational resilience is the biggest pandemic-driven change in risk management, and true for 93% of respondents. It was followed by greater board-level interest in strategic risks at 86%, and integration of business continuity planning into ERM at 78%. Some 83% of risk managers polled said they are conducting a review of strategic plans and risk, in response to the crisis. IRM said Covid-19 is likely to drive future risk management work to understand other high-impact, low-probability events, such as solar flares or meteorite strikes. While most firms responded well to the pandemic, 20% of survey respondents were having issues with funding, and about one third had seen a fall in sales and revenue. The IRM also pointed out that its survey is strongly focused on financial services firms, which accounted for 39% of participants and were on the whole better prepared for the crisis than other sectors that were more impacted, such as hospitality and the arts.

Pandemic to boost risk management budgets and standing, finds IRM survey

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