That according to the Governance Institute’s 2020 Risk Management Survey, almost 40 per cent of organisations are not regularly testing their risk and crisis plans.
The survey also found that only 11 per cent are regularly running scenarios around risk events. Relevantly, LSV conducted a desktop test of its business continuity plan (BCP) in August 2019, and then a physical test of the BCP.
The survey found that 69 per cent of the respondents had an Audit & Risk Committee (or equivalent) to assist in managing the risk function of their organisation. These committees were usually composed mainly of non-executive directors and Management.
LSV’s Finance, Risk & Audit Committee (referred to as FRAC) is one of the four mandated standing Committees required under the LSV constitution. The FRAC consists of between five and seven volunteer members, with at least two of the members being LSV Directors. LSV’s Risk Management Framework is reviewed by FRAC, who then in turn reports to the Board.
The other standing Board committees under the LSV Constitution are: Grievance & Judiciary Committee, Governance Committee and the Honours and Awards Committee. Each committee’s charter, composition and reporting obligations are set out in the By-Laws.
The survey also found that safety was noted as being the most commonly mentioned and top 3-5 year risks, along with damage to brand or reputation, impact due to policy and regulatory change, and economic shock.
Further details of the Governance Institute 2020 Risk Management Survey are available on the Governance Institute of Australia’s website.
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