CRO Survey | A CRO program initiative - How COVID-19 impacts the profession of the CRO - Deloitte
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO II Edition
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Contents
• Preface
• Executive summary
• Risk perception
• Risk mitigation and management tools
• Key organizational impacts of Covid-19
• Indicators, emergency plan and methodologies
• Lessons learned from the Covid-19 emergency
• Conclusions
• Contacts
2
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Preface
Uncertainty and disruption are the key elements of the CRO profession and risk management activities within
ongoing crisis where the Covid-19 pandemic stresses companies. More specifically, this report consists of three
companies’ resilient plans and organizations globally. parts. The first one is centered on understanding the
Climate change and environmental risks remain a crucial current and prospective presence and relevance of each
topic for CROs and enterprises. At the same time, the risk within the companies of the interviewees, focusing on
Covid-19 emergency emphasizes new emerging threats. seven macro risk areas: Strategic risk, Reputational risk,
Nearly 60% of the respondents of the latest Global Risk Financial risk, Liquidity & Credit risk, Cyber risk, Health
Perception Survey conducted by the World Economic risk, ESG risk, and other Operational risks; the second one
Forum (WEF) say that today “infectious diseases” and focuses on the impacts of Covid-19 on operations and
“livelihood crises” are the top short-term risk on a global performance of the risk functions; while the last part offers
scale. At the same time, climate change – and “Climate some lessons learned from this emergency, providing an
action failure” in particular - remains one of the most overview on the areas of intervention to be addressed in
impactful (catastrophic) long-term risks identified. the future to respond to the new needs shaped by the
pandemic.
Reacting to global supply chain shocks, putting people’s
health and safety first while assuring business continuity We hope that this analysis can provide the risk
are just some of the simultaneous business challenges management community valuable insights to better
that companies and leaders faced during 2020. In this understand the changes and transformation in terms
scenario, risk management has the chance to prove its of risks occurring in the business environment and the
role as a driver of new value and strategic goals within impacts that these can have on the way professionals are
the enterprise. The Covid-19 crisis has created new areas working and creating value within their companies.
That is the context in which Deloitte launched this new
of uncertainty and transformation that can drive Chief
edition of the annual analysis on risk perception, risk We wish to thank all the survey participants for their time
Risk Officers (CROs) to shift from a “loss prevention role”
management practices, and CRO’s initiatives. and valuable answers.
to a more strategic and leading one. To create value for
the entire organization, the Risk Managers must detect This report, which is developed under the CRO
changes in risky situations through early-warning systems, Program, aims to collect the points of view of relevant
leaders and players in this area to understand how risk Alessandro Di Lorenzo
giving the organization time to face each challenge and be
ready to answer in a timely fashion. perception evolves and how Covid-19 has impacted the CRO Program Leader Italy
3
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Executive summary
Risk perception How COVID-19 impacts the Lesson learned from the Covid-19
profession of the CRO: remote emergency
Several attention areas emerge from an analysis of macro working, emergency plans, and
risk categories: innovation and digitalization remain
relevant for CROs and risk managers, and respondents
methodologies Due to the Covid-19 emergency, new needs have
often mention low reactivity to market changes emerged both in organization and data management
and cybersecurity as risks. ESG related issues are How has the CRO way of working changed during the and in terms of methodologies. Regarding the
particularly relevant also among Reputational risks. Covid-19 emergency? Although risk reporting is not organization, specific attention should be given to
Among Financial risks, those related to interest rates impacted by remote working in terms of quality and process reengineering, mainly through automation and
are relevant. Still, the risk associated with stock market productivity, the organization of the activities within the digitalization; process reengineering is also an area where
volatility is the only one that is expected to increase risk management functions has partially changed. intervention is highly urgent. As to data management,
over a 1-year trend. This specific trend is connected to the need to improve the IT infrastructure is mentioned
Among the respondents, no significant difficulties are
the current emergency due to Covid-19 and its impacts by most respondents, 65% of whom consider it as a
observed in terms of data exchange and collaboration
on the equity markets. As to the other Operational risks, moderately urgent need. Finally, the most relevant new
between functions. Business-as-usual deadlines are
business continuity and IT systems’ failure are the most requirement is to review/develop business continuity
respected, while the top management looks for more
perceived risks among the respondents. Their relevance and emergency plans regarding methodologies.
information and analysis with higher frequency. In
could be due again to Covid-19 and to the increasing However, only very few respondents say that an
this situation, 3 out of 4 respondents feel that the risk
necessity of maintaining operations and assure continuity intervention is highly urgent in this area.
function is (at least partially) understaffed.
to the business during a lockdown and in a situation of
Early warning indicators and emergency plans have
extended remote working.
mostly worked as expected, helping CROs and risk
functions face the Covid-19 emergency. On the other
hand, significant difficulties have been faced by the risk
management function regarding the methodologies for
scenario definition and the calculation of regulatory
requirements (where applicable).
Note: All interviews took place between October and November 2020. The survey was administered through a web questionnaire (CAWI). The survey has
involved 17 interviewees, among them Italian CROs from several industries, including Banking, Insurance, Energy, and Life Sciences.
4
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
5
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Risk perception
Strategic risks
Warning to innovation Which of the following strategic risks exist in your company nowadays?
Current 1- year
and geopolitics impact trend
Innovation and enterprises’ ability
to face it (or not) is the current Low reactivity to market
71%
changes
significant strategic risk perceived by
the interviewees’ companies. The most
Products/ services failure 65%
frequently mentioned strategic risk is
related to the low reactivity to market The entry of disruptive
players into your sector/ 53%
changes, which confirms what worried industry
mostly the CROs involved in the
survey’s previous edition. The fear of 53%
Geopolitical developments
disrupting players entering the market/
sector is also perceived as a relevant De- globalization/ 6%
regionalization trends
risk by the respondents. The majority
of them say the 1-year trend related to 6%
Other
this specific risk is increasing. Over the
same time frame, the risks associated 0 10 20 30 40 50 60 70 80
with geopolitical development are
expected to grow, too.
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
6
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. The
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Reputational risk
Reputation, ESG and Which of the following reputational risks exist in your company nowadays?
Current 1- year
misconduct impact trend
The respondents’ focus is on «new»
risks connected to misconduct and Misconduct 71%
ESG related matters. In particular, the
latter risks are expected to grow over ESG related matters 65%
one year. As opposed to last edition’s
results, the risk related to information *
Social media 47%
governance is less perceived by the
respondents; it is a relevant topic for
Information governance 29%
financial institutions, which have given it
a lot of attention over the past years.
Other 6%
None 6%
0
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
* Regarding «Social media» the same percentage of respondents says that the 1- year trend is “increasing” or “constant”
7
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. The
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Financial risk
Increasing economic Which of the following financial risks exist in your company nowadays?
Current 1- year
uncertainty impacts impact trend
stock market volatility
Risks connected to interest
The risk related to interest rates is still rates
76%
relevant. However, the risk connected
Risks connected to stock 59%
to stock market volatility is perceived market volatility
as increasing over one year by the
Risks connected to real 47%
highest number of respondents. The estate depreciation
result can be explained by the effects 41%
Risks connected to currency
of the Covid-19 emergency since an volatility
increasing economic uncertainty Inflation/ deflation 18%
is generating turmoil on the stock
Risks connected to
markets and increasing volatility. commodity price volatility
18%
Other 6%
None 12%
0
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
8
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. The
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Liquidity & credit risk
Concerning for entity Which of the following liquidity & credit risks exist in your company nowadays?
Current 1- year
default and liquidity impact trend
Two significant trends emerge in this
area: on one side, the default risk for Entity (financial and non-
financial) default 65%
financial and non-financial entities
is considered as having a moderate
current impact, but it is expected to Sovereign default 35%
grow; on the other side, the liquidity
risk for non-financial institutions is 41%
Liquidity for credit 29%
currently perceived as high-impact, and institutions
it is expected to remain constant over
a 1-year horizon. Credit risk perception Liquidity for non-financial 29%
is somehow in line with the previous institutions
edition of the survey as concerns
impact and future trend. The latter None 12%
could be more Covid-19-driven since
the emergency has relatively increased 0 10 20 30 40 50 60 70 80
challenges regarding access to funding
sources, high costs, and assets disposal
(a situation that is expected to remain
stable over the next year).
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
9
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. The
CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Cyber risk
All eyes are on Which of the following cyber risks exist in your company nowadays?
Current 1- year
cybersecurity impact trend
A significant risk source is represented
by cybersecurity, which all the
respondents report as having a high 100%
Cybersecurity
current impact and an increasing
1-year trend. On the other side,
other technologies such as cloud
technologies and artificial
Cloud computing & storage 47%
intelligence are perceived as less risky.
29%
Artificial Intelligence 6%
0 20 40 60 80 100
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
10
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. TheCRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Health risk
Health and safety at Which of the following health risks exist in your company nowadays?
Current 1- year
work in the first place impact trend
The panel of respondents widely
perceives the risks related to health
Health and safety at work 65%
and safety at work. However, most
respondents consider this risk to be 59%
constant over a 1-year horizon and, in People 53%
general, to have a moderate (“medium”)
current impact. The same results 41%
emerge for risks related to people and
Risks connected to the 29%
quality of human capital
the quality of human capital (both
with medium impact and a constant
Other 6%
trend).
None 12%
0 10 20 30 40 50 60 70 80
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
11
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. TheCRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
ESG risk
Some alerts from the Which of the following ESG risks exist in your company nowadays?
Current 1- year
Covid-19 emergency impact trend
ESG risks and, more specifically,
environmental and climate change
Supply chain management 35%
risks are well-known and recognized
risks globally, especially over the long 59%
term. However, the Covid-19 emergency Human health 29%
has pointed out other specific ESG risks
too: 1 out of 3 respondents included
Government's 24%
supply chain management among the environmental policies
current ESG risks, where Covid-19 has
highlighted some weaknesses of the Inequalities and social
unrest
6% 18%
current situation; moreover, human
health is also cited by the respondents
among the existing ESG risks, with a Other 6%
medium impact and a constant 1-year
trend. 0 5 10 15 20 25 30 35
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
12
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. TheCRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
(Other) Operational risks
Business continuity, Which of the following (other) operational risks exist in your company
nowadays? Current 1- year
fraud and IT systems impact trend
are real concerns
Among the Operational risks, business Business continuity 88%
continuity, failure of IT systems, and
fraud are considered highly relevant. Internal and external frauds 76%
These risks have a «medium» current
impact and a constant 1-year trend. Failure of IT systems 71%
Litigation 65%
Inadequate internal 59%
processes
None 6%
0 20 40 60 80 100
perception | Strategic risks LEGENDA
The level of the (average)
current impact of each
H ig h
Medium
For each item, the chart shows the 1- year trend which is expected
from the highest percentage of respondents; the trend can be:
ing to innovation and geopolitics risk can be Low Increasing Costant Decreasing
13
tion and the deriving ability of enterprises to face it (or not) is the current major strategic risk perceived by the interviewees' companies. The most
ned strategic risk is related to the low reactivity to market changes, confirming again what worried mostly the CROs in the previous edition. TheCRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Risk mitigation and
management tools
Some risks have a full (tool)
coverage
For some risks categories, which are more consolidated or
relevant within the enterprises, a «full coverage» in terms
of tools for risk mitigation/management is expected: for
Financial, Liquidity & Credit risks, as well as for Cyber and
Operational risks, there is a high number of respondents
confirming the availability of existing or desired risk
mitigation tools. On the other hand, for emerging/new
risks and risks related to business strategy, no similar
«full coverage» has been achieved.
14CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Risk
Risk
mitigation
mitigation
and
and
management
management
tools
tools
SoSmoemreisrkisskhsahveavaefaulflu(ltlo(otol)ocl)ovco
ervaegraege
ForFor
some
somerisks
risks
categories,
categories,
which
which
areare
moremore
consolidated
consolidatedor relevant
or relevantwithin
within
thethe
enterprises,
enterprises,
a «full coverage»
a «full coverage»in terms
in terms
of tools
of tools
for for
riskrisk
mitigation/
mitigation/
management
management is expected:
is expected:
for for
Financial,
Financial,
Liquidity
Liquidityandand
Credit
Credit
risks,
risks,
as well
as well
as for
as for
Cyber
Cyber
andand
Operational
Operational
risks,
risks,
thethe
number
numberof respondents
of respondents saying
saying
thatthat
there
there
areare
existing
existing
or desired
or desired
risks
risks
mitigation
mitigation
tooltool
is high.
is high.
On On
thethe
other
other
side, forfor
side, emerging/
emerging/newnew
risks
risks
andand
for for
those
those
risks
risks
related
related
to business
to business strategy,
strategy,
a similar «full
a similar «full
coverage»
coverage» is not
is not
reached.
reached.
Are there in your company any existing risk mitigation/ management Are there in your company anydedesired risk mitigation/ management
Are Are
there
there
in your
in your
company
company
any any xigstrisk
existein ing risk
mitigation/
mitigation/
management
management
toolstools
for for Are Are
there
there
in your
in your
company
company
any anysid
reedsirisk
red risk
mitigation/
mitigation/
management
management
toolstools
for for
tools
AreAre
there infor
there inthese
youryour risks?
company
company anyany
existing
existing
theserisk
theserisk
mitigation/
risks? mitigation/
risks? management
managementtoolstools
for for tools
AreArefor
there these
there
in your risks?
in your
company
companyanyany
desired
desired
these risk
these risk
mitigation/
risks? mitigation/
risks? management
management
tools tools
for for
these
these
risks?
risks? these
these
risks?
risks?
Yes YesNo No Yes YesNo No
Strategic
Strategic
risksrisks 59%59% 41%41% Strategic
Strategic
risksrisks 24%24% 76%76%
Reputational
Reputational
risksrisks 59%59% 41%41% Reputational
Reputational
risksrisks 35%35% 65%65%
Financial
Financial
risksrisks 76%76% 24%24% Financial
Financial
risksrisks 29%29% 71%71%
Liquidity
Liquidity
& credit
& credit
risksrisks 94%94% 6% 6% Liquidity
Liquidity
& credit
& credit
risksrisks 18%18% 82%82%
Cyber
Cyber
risksrisks 82%82% 18%18% Cyber
Cyber
risksrisks 18%18% 82%82%
Health
Health
risksrisks 76%76% 24%24% Health
Health
risksrisks6% 6% 94%94%
ESGESG
risksrisks 41%41% 59%59% ESGESG
risksrisks 29%29% 71%71%
(Other)
(Other)
operational
operational
risksrisks 76%76% 24%24% (Other)
(Other)
operational
operational
risksrisks 24%24% 76%76%
9 9
15CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Key organizational impacts
of Covid-19
During the Covid-19 emergency…
Remote working has had a positive or neutral impact
on the productivity and quality of risk reporting. However,
it has affected the organization of the activities within
the risk management function, if not entirely, at least
partially. Moreover, most of the respondents declare that
no difficulties have been faced in data exchange and
collaboration between the risk management function
and other areas and that the Business As Usual (BAU)
deadlines have been respected during the emergency.
In contrast, the top management has asked for more
information with higher frequency. In this situation,
3 out of 4 respondents feel that the risk function is
understaffed.
16CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
COVID-19 organizational key impacts
During the Covid-19 emergency…
COVID-19 organizational key impacts
During the Covid-19 emergency, smart working has a positive or neutral impact on productivity and quality of risk reporting, although it does affect the
During theofCthe
organization oviactivities
d-19 emwithin
ergethe
ncyrisk
… management function, if not entirely at least partially. Moreover, during the emergency the large majority of
the respondents declare that no difficulties had been faced in data exchange and collaboration between the risk management function and other areas,
During
that thethe
BAUCovid-19 emergency,
deadlines smart working
are respected, while thehas
topamanagement
positive or neutral
asked forimpact
moreon productivity
information andhigher
with quality of risk reporting,
frequencies. In this although
situation,it3does
out of affect
4 the
organization of
respondents feelthe activities
that riskwithin
theimpact theisrisk
function management function, if not entirely at least partially. Moreover, during the emergency the large majority of
understaffed.
...how did smart working ...did smart working affect the ...did the risk management area
the respondents declare
productivity and quality of risk
that no difficulties had been faced in data exchange and
activities organization within the risk
collaboration between the risk management function and other areas,
meet difficulties in data exchange/
that didBAU
...howthe
reporting? smartdeadlines areproductivity
working impact respected, while the top management
...did smart working
management askedthe
affect
function? foractivities's
more information with higher frequencies.
...did Inother
this situation,
the risk management
collaboration with area 3 out ofin4
meet difficulties
areas?
respondents feel
and quality of risk that the risk function is understaffed.
reporting? organization within the risk management function? data exchange/ collaboration with other areas?
...how did smart working impact productivity ...did smart working affect the activities's ...did
29%the risk management area meet difficulties in
and41%
quality of risk reporting? organization within the risk management function? data exchange/ collaboration with other areas?
29% 47%
Positively Yes Yes
Neutral impact Partially 29% Some
41%
Negatively 29% No No
47%
Positively Yes Yes
59% Neutral impact
24% Partially 71% Some
Negatively No No
...did the company respect the Business As ...did the top management request additional According to the current workload, do you feel the
Usual deadlines? 59% information/ higher frequency? risk management function/
24% 71% area is understaffed?
According to the current workload, do
...did the company respect the Business ...did the top management request you feel the risk management function/
...did the company respect the Business As ...did the top management request additional According to the current workload, do you feel the
94% deadlines? additional information/ area is understaffed?
as Usual
Usual deadlines? 88%
information/ higher frequency?higher frequency? 35%
risk management function/ area is understaffed?
Yes
Yes Yes
Partially
94% No 88% No 35% No
41% Yes
Yes 12% Yes
Partially
6% No No 24%
No 10
41%
12%
6% 24%
10
17CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Indicators, emergency plan
and methodologies
During the Covid-19 emergency…
Almost all respondents agree that the early warning
indicators have been able to identify the impacts
of the Covid-19 crisis, at least partially. Moreover,
the emergency plans the companies put in place
have worked (at least partially) as expected. However,
the risk management function has met significant
difficulties regarding the methodologies for defining a
scenario analysis and the calculation of regulatory
requirements (where applicable); yet, no significant
difficulties have been encountered regarding risk
reporting, risk measurement, and risk assessment.
18CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Indicators,
Indicators,
emergency
emergency
plan
plan
andand
methodologies
methodologies
DurDinugrinthgethCeovCiodv-1id9-1e9meem
rgeerngceyn…cy…
Indicators, emergency plan and methodologies
D
Almost urall
Almostinrespondents
gallthrespondents
e Covidagree-1agree
9 that
emthat
ethe
rgthe
eearly
ncearly
ywarning
… warning indicators
indicatorswere were
ableable
to identify
to identify
the the
impacts
impacts
of the
of the
Covid-19
Covid-19
crisis,
crisis,
at least
at least
partially.
partially.
Moreover,
Moreover,
the the
emergency
emergency plansplans
the the
companies
companies put put
in place
in place
worked
worked
(at least
(at least
partially)
partially)
as expected.
as expected.
However,
However,
major
major
difficulties
difficulties
werewere
metmetby the
by the
risk risk
management
managementfunction
function
Almostthe
regarding
regarding all the
respondents
methodologies agree
methodologies thatdefining
for defining
for early
the scenariowarning
scenario indicators
analysis
analysis
andandthewere
the able toofidentify
calculation
calculation the impacts
regulatory
of regulatory of the(where
requirements
requirements Covid-19
(where crisis, at least
applicable);
applicable);
on the
onpartially.
the Moreover,
contrary,
contrary,
no major the
no major
...have
emergency
difficulties the
difficulties early
plans
havehavebeen warning
the
been indicators
companies
encountered
encountered for
putregarding
in place
regarding riskworked
risk
reporting,(at risk
leastrisk
reporting, partially)
measurement as expected.
measurement andand However,
risk risk
assessment.major difficulties were met by the risk management function
assessment.
risk worked correctly, identifying the
regarding the methodologies for defining scenario analysis and the calculation of regulatory requirements (where applicable); on the contrary, no major
impact
...did...did
the risk of
riskthe
the early Covid-19
early
warning
warning crisis?*
indicators
indicators
workwork
properly, …has
properly, risk the company faced difficulties in the methodologies used in the following areas?
difficulties have been encountered regarding reporting, risk measurement and risk assessment.
identifying
identifying
the impact
the impact
of COVID-19
of COVID-19
crisis?*
crisis?* …did…did
the company
the company
face face
…diddifficulties
thedifficulties
…did companyinface
the
the companyindifficulties
methodologies
the difficulties
face methodologies usedused
in the
in following
in theinmethodologies
the the following
methodologies
used in theinareas?
used the areas?
following
following
areas?
areas?
...did the risk early warning indicators work properly,
identifying the impact of COVID-19 crisis?* …did the company face
…diddifficulties
the company inface
the difficulties
methodologies
Yes Yes inPartiallyusedNoin the
thePartially No following
methodologies used in the areas?
following areas?
38%38%
Yes Yes Yes Partially No
38% Scenario
Scenario definition 18%18%
definition 53%53% 29%29%
Partially
Partially
No No
Yes
56%56% Scenario definition 18% 53% 29%
Partially
6% 6% No Regulatory
Regulatory
requirements
requirements
calculation
calculation
(for financial
(for financial entities) 15%15%
entities) 23%23% 62%62%
56%
6% Regulatory requirements calculation (for financial entities) 15% 23% 62%
...did...did
the emergency
the emergency
plan plan
workwork
as expected?
as expected?
...has the emergency plan worked as Risk measurement
Risk measurement 29%29% 71%71%
expected?
...did the emergency plan work as expected?
71%71% Risk measurement 29% 71%
Yes Yes Risk assessment 18%18%
Risk assessment 82%82%
71% Partially
Partially
No No Risk assessment 18% 82%
Yes
Partially
29%29% Risk reporting 6% 6%
Risk reporting 94%94%
No
29% Risk reporting 6% 94% 11 11
*Percentages
*Percentages
do notdo
consider
not consider
the answers
the answers
«N/A»«N/A»
*Percentagesdo
*Percentages do not
not consider
consider the answers «N/A»
«N/A» 11
19CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Lessons learned from the Covid-19
emergency
Because of the COVID-19
emergency…
Due to the Covid-19 emergency, new needs have
emerged in the following areas: organization, data
management, and risk methodologies. In particular, there
is a significant need for improvement in these areas:
• For organization → need for process reengineering
through automation and digitalization.
• For data management → need to improve the IT
infrastructure.
• For methodologies → need to review/develop business
continuity and emergency plans.
20CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Lessons learned from the Covid-19 emergency
Because of the COVID-19 emergency…
Due to the Covid-19 emergency, new needs emerged in the areas of organization, data management and risk methodologies. In particular, the areas with
major needs for improvements are:
• For organization à the need of process reengineering, with automation and digitalization
• For data management à the need to improve IT infrastructure
• For methodologies à the need to review/ develop business continuity and emergency plans
…have new needs emerged regarding …have new needs emerged regarding … have new needs emerged regarding
the organization?
…have new needs emerged regarding the organization? data
…havemanagement?
new needs emerged regarding data management? methodologies?
… have new needs emerged regarding methodologies?
Need for… Need to… Need for a review/ development of
…process reengineering
...improve IT infrastructure ...emergency/ business
with process automation/ 24% 47% 24% 65% 24% 12% 47% 41% 6%
continuity plans 6%
6%
digitalization
...improve data
...specific training/ transformation/ aggregation 18% 24% 35% 24%
competencies systems
41% 24% 24% ...early warning indicators 12% 47% 18% 24%
(cybersecurity, health and 12%
safety at work, etc.) ...strengthen data quality
and data governance 18% 24% 29% 29%
framework
...a comprehensive review ...symplified - although
of the reporting to the top 12% 18% 59% accurate - proxies for risk 18% 29% 29% 24%
12% ...improve data series 12% 6% 41% 41%
management quantification
Yes - High urgency Yes - Moderate urgency Yes - High urgency Yes - Moderate urgency Yes - High urgency Yes - Moderate urgency
Yes - Minor urgency No Yes - Minor urgency No Yes - Minor urgency No 12
21CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Conclusions
The Covid-19 emergency has put under stress risk
management functions. They must face and manage new
In the first half of 2020, the Indeed, the current digital infrastructure and tools
appear to be less effective in managing emerging new
uncertainties in terms of people’s health and safety, and number of severe cyber attacks challenges and risks. According to Deloitte’s global survey
costs. New risks and challenges have been added to the “Beyond the hype - Global Digital Risk Survey,” 60% of
existing ones. Whereas at the beginning of 2020, attention raised by 7% compared to the the respondents rate the effectiveness of current risk
was mainly focused on climate change and environmental same period in 2019, with a management tooling as five (or less) out of ten, with
risks – as pointed out by edition after edition of the 24% using in-house developed tools and only 6% new
WEF Global Risks Report itself - today, these should be significant impact in 53% of the technology start-up solutions. Moreover, around one-
managed under the new scenario and challenges pushed
forward by Covid-19. As further uncertainty spreads,
cases. fifth of organizations leverage disruptive technology for
core stages of the risk management lifecycle, 19% for risk
CROs and their staff need more information and support. identification, 21% for risk monitoring, and 17% for risk
Rapporto Clusit 2020
Today, their main challenges are scenario definition and reporting.
regulatory requirement calculation, while they appear
As emphasized in another recent Deloitte report on risk
more confident in methodologies such as risk assessment,
management - “Rebooting risk management - Making
risk measurement, and risk reporting.
risk relevant in a world remade by COVID-19”-, Covid-19
Information technologies and digitalization are a risk has also highlighted that the current risk programs used
category that companies should consider and protect, by enterprises are still calibrated to address mainly
especially in terms of cybersecurity, and an enabler well-known financial, operational, cyber, compliance and
that can help and support the activities and efficiency legal risks, rather than low-probability events with higher
of the function and the organization. The number of potential impacts. In this context, the current emergency
cyberattacks is increasing on the one hand; however, on can be a chance to re-align the programs to better face
the other, CROs are asking for more process automation and manage uncertainties like those encountered during
and an enhanced IT infrastructure to support data the health emergency. The current situation can allow
management. CROs and risk managers to rethink and reshape their
role within the organizations, providing the skills, tools,
and methodologies necessary to drive and support the
enterprise through uncertain times.
22CRO Survey | A CRO program initiative How COVID-19 impacts the profession of the CRO
Contacts
CRO program
Alessandro Di Lorenzo
Deloitte Risk Advisory Partner
CRO Program Leader
adilorenzo@deloitte.it
Ilario Cadringher
Deloitte Risk Advisory Director
CRO Program Deputy Leader
icadringher@deloitte.it
Research & Editorial
Camilla Bellini
Clients&Industries
Eminence and Market Insight
Specialist Deloitte Italia
cabellini@deloitte.it
23Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organization”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities. © 2021 Deloitte Italy S.p.A. Deloitte Creative Team - Italy | SG.005.21
You can also read
