Many executives are aware of the importance of risk management. However, CFO Magazine recently profiled one problem that businesses must confront – the possibility that focusing on “pet” risks can distract corporate leaders and hinder their ability to address big-picture issues.
Pet risks are those that seem particularly important to certain managers, but do not actually present a significant challenge to the business’s overall health. Sometimes, these issues may be inflated by being associated with known problems or larger general risk factors.
Alyssa Martin, executive partner in advisory services at a Southwest regional accounting firm, told attendees of the recent Institute of Internal Auditors conference that businesses should place a high priority on establishing a comprehensive risk management process. She asserted that such a system should be able to differentiate between a true risk facing the business and a simple operational issue, such as an aging piece of equipment that requires repair or replacement.
“For 23 years I’ve seen company management at all levels try to drive their own issues,” said Martin. “But, when it supersedes more urgent risks, it’s not OK.”
Interim financial professionals can help fill the gap for companies that do not have established risk management practices. Working with an internal audit consultant can help corporations identify and address the most pressing risks that are currently facing them.
Alternatively, companies that are interested in hiring an executive with significant risk management experience should contact professional recruiters to aid in their search. Recruitment firms can help businesses conduct fast, effective searches that match them with talented individuals who have the required skills and will fit with the established organizational culture.