Risk maturity linked with corporate growth- FERMA
Maturity of risk management processes is correlated with sustainable improvements in corporate performance.
Companies with the most advanced risk management showed the most growth for the past five years, says a benchmarking survey run by a European risk management association.
The companies were measured in terms of earnings before interest, taxes, depreciation and amortisation (EBITDA).
The survey revealed:
- Of companies with advanced risk management practices, 28% reported an EBITDA growth rate of more than 10%, compared to 22% whose risk management was classed as mature, 15% for moderate and 16% for emerging.
- Among companies with an EBITDA growth rate of more than 20%, three-quarters (74%) have mature or advanced risk management practices.
FERMA president Jorge Luzzi, said: “We have long believed that good risk management contributes to sustainable corporate growth. Now we have clear evidence that there is a correlation. This is a particularly important finding in light of the pressures on corporate results during the last five years.”
The 2012 Risk Management Benchmarking Survey of the Federation of European Risk Management Associations (FERMA) was conducted in collaboration with AXA Corporate Solutions and Ernst & Young.
It collated 809 responses from risk and insurance managers in European 20 countries, and was the sixth edition of the survey, which has taken place every other year since 2002.