ecently, a business report was commissioned concerning the top 5 global sustainability risks and opportunities facing organizations today. The report was developed through surveys and panels conducted among 6,160 management professionals with varying degrees of responsibility within the manufacturing, financial, government, and service sectors. (1) The top identified risks included:
Using this report and risk information concerning the environment as background, how then does the compliance and insurance community view their responsibilities for ensuring that companies and organizations meet compliance, risk, and insurance requirements? Ethical Corporation conducted a benchmarking study of compliance and risk among over 250 executives who work in the compliance and insurance industry in the US and Europe. (2) A few interesting statistics showed that nearly 85% of the respondents indicated that putting customers first was their number one business priority for this year.
At the same time, over 55% of the participants indicated that the role of the compliance officer was changing. Furthermore, over 85% of the professionals interviewed felt that creating a risk and compliance culture that satisfies regulatory requirements is tantamount to success and preventing environmental risks and issues from occurring. So what then are the highest priorities for businesses to address both risk and opportunities? The key strategies are:
In order to achieve the desired results, the Insurance Culture Benchmarking Study goes on to report the critical compliance area priorities including: resource spending, changing organizational models, improving technology development, supporting “front line” management, conducting more in-depth and effective risk programs, and ensuring customer care.
Potential sustainability risks can be seen on the horizon in many areas from the threat of weather and natural disasters, to the access of natural resources and materials, as well as health and wellness, and urbanization issues. The question for business is how to address these concerns moving forward?
As the studies indicate, compliance and risk management is undergoing change, from organizational structure, to function and job responsibility, as well as to the creation of new and more effective compliance programs focused on the customer. To be an effective compliance leader often requires raising the bar internally first, setting new course changes and directions for your business, and monitoring results and performance along the way with new metrics. Cost savings can be achieved and potential risks avoided, and with improved performance your insurance premiums might even be lowered!