Large Companies Getting Better at Managing Risks According to New Protiviti Risk Barometer

    Nearly half of companies rate themselves "not very effective," not using
    risk management best practices

    TORONTO, Aug. 7 /CNW/ - Large companies have improved their ability to
identify and manage potentially critical business risks, according to the 2007
U.S. Risk Barometer study released today by Protiviti Inc. However, there is
still substantial room for improvement, the Protiviti report shows. Nearly
half of executives rated their organizations less than "very effective" at
identifying and managing significant risks, leaving them vulnerable to
unanticipated losses, reduced productivity and business disruptions. A copy of
the Risk Barometer report is available at
    "With all the attention today on GRC (governance, risk management and
compliance), the results of the Risk Barometer can provide companies with
insight about how their risk capabilities and appetites stand compared to the
Fortune 1000 and 2000 companies in Protiviti's study," said Everett Gibbs,
managing director and chairman of Protiviti's operating committee. "The good
news is that 53 percent of companies surveyed perceive themselves to be 'very
effective' at managing risk. The not-so-good news is that 47 percent of large
companies, by their own admission, are still below par in managing their
risks. This should be a wake-up call to senior management, the board and
    "There has been a 15 percent increase in the percentage of companies
managing risk very effectively since our 2006 U.S. Risk Barometer, yet a high
percentage of companies have significant room for improvement to protect and
enhance enterprise value," added Gibbs.

    The Top Risks Keeping Executives Awake at Night

    The 2007 U.S. Risk Barometer study, which surveyed 150 senior-level
executives (half of whom were CEOs or CFOs) divided equally between Fortune
1000 and Fortune 2000 companies, found that competitor risk is viewed as the
top risk to these organizations. Additionally, customer satisfaction, the
regulatory environment, information systems and IT security, and changing
markets make up the first five of the top ten risks as determined by the
    While competitor risk ranked highest overall, the Risk Barometer study
found the top risk varied by industry groupings:

    -   Manufacturing, distribution and technology - Competitor
    -   Financial services and real estate - Financial markets
    -   Healthcare and life sciences - Regulatory environment
    -   Media, hospitality and services - Customer satisfaction
    -   Consumer products and retail - Competitor
    -   Energy and utilities - Regulatory environment

    "Having now completed three years of Sarbanes-Oxley compliance, it's
increasingly clear that the largest U.S. companies are finally focusing on
other risks beyond regulatory and compliance-related issues," said James
Pajakowski, managing director and Protiviti's leader of Business Risk

    Shift Seen in Benefits of Risk Management

    Survey results show executives' appreciation of the potential
organizational impact of better risk management. In Protiviti's 2006 U.S. Risk
Barometer study, lower insurance premiums were the top-ranked benefit of risk
management; however, this year, "quicker identification of risk" was the most
oft-cited benefit, followed closely by "better risk information and measures,"
and "improvements in process performance."
    According to Pajakowski, "The timely identification of risk, use of risk
metrics and monitoring, and a sharper focus on improving business performance
provide a more compelling value proposition with C-level executives."

    Change is on the Horizon

    Among companies that rated themselves as "not very effective," 77 percent
are planning at least some changes to their risk management capabilities over
the next two years, and 14 percent plan significant changes. Nearly half of
the "not very effective" companies noted that a single event prompted the
decision to change. This finding is important because it implies an ad hoc,
reactive state for companies lacking high confidence in their risk management
    In comparison, among companies rating themselves "very effective" in risk
management, few indicated that a single event prompted change. "Companies with
a more sophisticated risk management infrastructure are anticipatory and
therefore less apt to be caught off guard by new developments. This ultimately
gives them a competitive edge," noted Pajakowski.

    Blueprint for Improvement

    The responses of organizations rating themselves to be "very effective"
at identifying and managing all potentially significant risks provide a
blueprint for enhancing risk management capabilities. According to the survey,
these top performers are more likely to utilize the following risk management
best practices:

    -   Rigorously deploy a formal risk management policy, a formal risk
        assessment process, and a risk monitoring and reporting process
        across the organization

    -   Formally integrate risk assessment processes and risk responses with
        the activities of the business planning and strategy-setting

    -   Quantify risk and evaluate their risk profile

    -   Assign to a Chief Risk Officer (or an equivalent executive) the
        primary responsibility for coordinating risk management policy,
        execution and reporting.

    Protiviti's 2007 U.S. Risk Barometer survey was conducted by the
Corporate Research Group of Penn, Schoen & Berland, a research-based
communications firm that conducts quantitative and qualitative research

    About Protiviti

    Protiviti ( is a leading provider of independent risk
consulting and internal audit services. The company provides consulting and
advisory services to help clients identify, assess, measure and manage
financial, operational and technology-related risks encountered in their
industries, and assists in the implementation of the processes and controls to
enable their continued monitoring. Protiviti also offers a full spectrum of
internal audit services to assist management and directors with their internal
audit functions, including full outsourcing, co-sourcing, technology and tool
implementation, and quality assessment and readiness reviews. Protiviti, which
has 60 locations in the Americas, Asia-Pacific and Europe, is a wholly owned
subsidiary of Robert Half International Inc. (NYSE symbol: RHI). Founded in
1948, Robert Half International is a member of the S&P 500 index.

    Protiviti is not licensed or registered as a public accounting firm and
does not issue opinions on financial statements or offer attestation services.

    Note to Editors: Canadian-based managing director is available to provide
local perspective and how companies are impacted by Canadian corporate
governance requirements. Graphics and more from the Protiviti 2007 U.S. Risk
Barometer are available as jpeg files or PDFs upon request.

For further information:

For further information: Editor Contact (Canada): Jim Dimovski, (647)
288-4946,; Editor Contacts (U.S): Kevin Donahue,
(650) 234-6385,; Kathy Keller, (650) 234-6252,

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