Cybersecurity, economic downturn, regulatory and financial risks are Hong Kong executives biggest worries in 2017, a survey looking at the extent to which Hong Kong-listed companies have embedded risk management in their businesses found.
Findings in the report of the survey by KPMG and the Hong Kong Institute of Chartered Secretaries (HKICS) released on Thursday, showed that economic environment retains its spot from the 2015 as the top risk.
Financial risks moved up in the top five list to second position, from the fifth spot in 2015.
Cybersecurity emerged as a risk, taking fourth spot in this year’s survey on the back the increase and more frequent global attacks.
“One example of the cybersecurity risk is the WannaCry virus,” said Jyoti Vazirani, partner and head of financial risk management at KPMG China, referring to the ransomware attack that ravaged computers across the world last month.
Vazirani also said that business and regulatory requirements had prompted companies to boost their risk management programmes.
“However, many of the programmes tend to focus on complying with current requirements, rather than serving as a strategic tool that adds value and supports growth. As a result, some companies may not be able to realise and unlock the true benefits of robust risk management,” she said.
The survey report – Risk Management: navigating change in Hong Kong – found that the new corporate governance code that took effect on 1 January 2016, has helped to raise oversight of risk management, which is increasingly finding its way onto the agendas of companies’ executive management and boards.
Nevertheless, many businesses have not fully integrated risk management into their decision-making process, and building up a holistic view of risk remains a key challenge.
Almost half of the 197 respondents find it challenging to understand the risk exposure across all business units, while more than a third of respondents are unsure of how risks impact the top strategic objectives.
“The key themes emerging from the survey indicate that businesses need to refocus their risk resources in a more effective manner, and adopt a holistic and integrated approach to managing risk,” Ivan Tam, president of HKICS, said.
The survey interviewed 197 Hong Kong-based senior executives.