Before the global financial crisis back in 2007-2008, risk reporting may not have been on the plate for many companies and organisations around the world. However, since then, there has been “increased attention to the formalisation of risk management” (CGMA, 2012).
Nevertheless, companies are making themselves vulnerable by not deploying a structured approach towards risk management. Several issues with enterprise risk management in Vietnam could be listed:
- There is lack of a formal, standardised process for risk assessment, risk reporting and risk management framework.
- Companies’ risk assessment process has mainly been around factors that could affect business strategies, rather than the strategies themselves. What if a strategy is already outdated?
- Businesses are too focused on short-term goals as they perceive that these short-term objectives are more attainable and less risky. However, ignoring long-term goals might as well be risky, if not riskier.
- In Vietnam, information transparency is still a novel thing, which creates huge obstacles to collect and report risk information to the board of directors
Vietnamese companies can learn a lot from their Western counterparts where risk and performance reporting to the board are integrated. Find out what European businesses have been doing with a focus on risk management and risk reporting in CGMA study “Integrating risk into performance: Reporting to the board of directors”.
From TRG blog
Download full report at here
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