UK companies are failing to exploit their competitive advantage in the application of risk management, according to new research from broker Marsh.
The majority of UK senior executives surveyed admitted that they do not have procedures in place to properly manage operational and strategic risks, which Marsh said were responsible for the majority of company failures in the 21st century.
The significant risks for which UK companies are least prepared are: increased competition, adverse changes in customer demand, and losing key staff to competitors, revealed the survey.
Marsh said 71% of UK companies claimed increased competition was a significant risk to their business, while only 41% said they had a robust mitigation plan in place to deal with this risk.
In Europe, increased competition was also seen as the most significant risk, but 51% of companies said they were taking actions to address this.
“A similar survey carried out by Marsh in 2002 showed UK companies to be ahead of the game in the application of risk management. These results therefore give cause for concern,” said Marsh Europe & Middle East corporate client practice leader Chris Lay.
“While risk management as a corporate discipline has progressed over the past two years, too many UK companies are missing an opportunity to use strategic risk management to develop competitive advantage.”
The report, Survey of Risk 2004, includes findings from 950 companies in 11 countries in Europe, with revenues between €30m and €300m.
