Country / Language

Companies Set to Increase Investment in Risk Management as Business Risks Grow, According to Nexia International Survey


(NEW YORK) – A global survey of companies and their professional advisers reveals that companies are set to invest more in risk management in the face of growing business risks, says Nexia International (Nexia), a leading network of independent accounting and consulting firms.

Nexia’s Global Risk Management Survey provides a unique combination of perspectives on current risk management practices among mid-market corporates, based on concurrent surveys of over 70 companies and more than 40 advisory firms around the world.

Awareness of risk management is clearly on the increase. Almost half (48%) of companies surveyed expect to increase spending on risk management in the coming year. This is supported by the views of Nexia member firms surveyed – 63% expect the level of risk management services they provide toincrease in the year ahead.

Over half of Nexia member firms believe that the risk profile in their country has increased in the last year, reflecting current widespread political, economic and social uncertainties. Glenn Davis, Partner at Nexia International member firm CohnReznick LLP, says: “Risk management has become critically important as businesses are challenged to remain competitive while grappling with uncertain operational and financial conditions.”

Survey highlights:

  • Almost half (48%) of companies surveyed expect spending on risk management to increase in the coming year.
  • Over half (51%) of Nexia member firms believe the risk profile in their country has increased in the last year.
  • Compliance and operational risks were ranked as the most significant among the companies surveyed.
  • Two-thirds (67%) of participating companies have a formal risk assessment process in place, but a third (33%)rate these as only partially effective or lower.
  • Over half (57%) of companies surveyed have yet to put a formal risk management training program in place
  • 38% of companies say that risk tolerances are only reviewed annually or less frequently.

Growing risks

Overall, the companies surveyed ranked compliance and operational risk as the most significant risks facing their businesses. Respondents indicated that they are least prepared to deal with social media, succession planning, andnatural or man-made disasters. Respondents also highlighted the risks surrounding global expansion as a key area.

“Regardless of the size of the entity, the risks are broadly the same, but the ramifications are much greater for small and mid-sized organizations”, says Davis.

While two-thirds (67%) of participating companies reported that they have a formal risk assessment process in place, a third (33%) rated these as only partially effective or lower. A high proportion (24%) of companies reported being only partially effective, and a further 19% ineffective, in their use of IT to mitigate risk.

Nexia member firms appear less confident in the effectiveness of their clients’ risk management practices, with half of member firms believing that their clients are only partially effective in undertaking formal risk assessments.

Risk management training

The survey indicates growing recognition of the need for formal risk management training programmes aimed at promoting awareness about risk within companies. Yet over half (57%) of companies surveyed have yet to put a formal training programme in place, and of those that have, a third (33%) believe that their effectiveness could be improved significantly.

Nexia member firm respondents also appear less confident in the effectiveness of their clients’ formal risk management training, with 61% rating it as only partially effective.

Ownership and oversight

On a more positive note, survey respondents indicate high levels of senior oversight and ownership of the risk management process. Nearly three-quarters (74%) of companies surveyed rated the involvement of senior management executives in discussions regarding risk management as effective or very effective. Two-thirds (64%) have a designated senior executive as the owner of the process, with another 14% in the process of doing so.

“These survey results are encouraging,” says Davis. “They demonstrate the active involvement of boards and business owners in the risk management process, providing reasonable oversight and largely engaging in discussions with the individual responsible for the risk management process.”

Where clients have a risk management process owner, 30% said that the person’s role, responsibilities and authority were very well defined, while another 41% said that they were reasonably well defined. However, a quarter (25%) of Nexia firms said that only a “few” of their clients clearly define the risk management owner role.

Risk tolerances

It is reassuring that the risk tolerances of nearly two-thirds (62%) of companies are established by management and approved by the proper authority, although this leaves a substantial minority that do not follow this practice. Of those companies with a formal risk tolerance mechanism in place, 38% say that risk tolerances are only reviewed annually or less frequently.

“Risk tolerances should serve as an ongoing guide to business managers to perform at optimal levels, but in a controlled manner,” explains Davis. “Merely establishing and approving risk tolerances are insufficient safeguards – it’s equally important to review them on a continual or frequent basis.”

For a full copy of Nexia International’s Global Risk Management Report, please visit:

About our survey

Nexia International’s Global Risk Management Survey of business clients and member firms was conducted from April to June 2013. Respondents were senior employees of 73 small-to-medium sized public, private and not-for-profit entities across the world, from a wide range of business sectors.This was augmented by a concurrent survey of 41 Nexia member firms.

TheGlobal Risk Management Report on the survey findingsprovides a unique snapshot of risk management practices among predominantly mid-market businesses from around the world. It highlights current risk management challenges facing those businesses and provides insights into the latest risk management trends and solutions. It also includes a checklist of questions arising from the survey to help companies benchmark their current risk management practices.

Note to editors:

Nexia International is a leading worldwide network of independent accounting and consulting firms, providing a comprehensive portfolio of audit, accountancy, tax and advisory services.

Nexia International does not deliver services in its own name or otherwise. Nexia International and its member firms are not part of a worldwide partnership. Nexia International does not accept any responsibility for the commission of any act, or omission to act by, or the liabilities of, any of its members. Each member firm within Nexia International is a separate legal entity.

Nexia International does not accept liability for any loss arising from any action taken, or omission, on the basis of the content in this article or any documentation and external links provided. Professional advice should be obtained before acting or refraining from acting on the contents of this article.

Any and all intellectual property rights subsisting in this document are, and shall continue to be, owned by (or licensed to) Nexia International Limited.

References to Nexia or Nexia International are to Nexia International Limited.

Search Our People

Search Our People

Look ahead. Gain insight. Imagine more. Is your business ready to break through?

View our new TV commercial..

Industry Outlooks

Industry Outlooks

Gain insight into what is ahead for the Commercial Real Estate, Technology and Middle Market Private Equity industries.


Learn about our upcoming events.


Working With Us

Working With Us

What makes CohnReznick different from others in our profession? And what should our clients come to expect when working with us? The answer is The CohnReznick Advantage. Contact us to learn how we can out the CohnReznick Advantage to work for your business.


The value of an organization is determined by the skills and qualities of its leaders. With more than 280 partners serving clients nationwide, CohnReznick is renowned for the diverse experiences, knowledge and backgrounds of its leadership.

Learn More


We align our services in three segments: Accounting and Assurance, Tax, and Advisory. This approach allows us to provide holistic solutions to complex business problems and to seize upon opportunities requiring an integrated approach.

Learn More


Accounting and tax issues different significantly based on an organization's industry. We provide clients with expertise in nearly two dozen industries – we know the opportunities, the obstacles, the competitive landscape.

Learn more


CohnReznick professionals are thought leaders in their industries. Clients benefit from relevant and timely economic, legislative and industry insights that can keep them a step ahead of competition.

Learn More

Global Reach

Our involvement in the Nexia International network of firms enables us assist our clients wherever they do business-providing local expertise and connections wherever they needed. Nexia is comprised of 20,000 professionals operating in over 100 countries.

Learn More