Despite investment institutions being acutely aware of the risks they face since the global financial crisis, many still need to improve the way those risks are communicated internally, according to new research by the Economist Intelligence Unit (EIU) commissioned by State Street Corporation.
The survey entitled "Closing the communication gap: How institutional investors are building risk-aware cultures" was conducted in the first quarter of 2013. Respondents included nearly 300 executives of investment institutions – 48% of which were asset managers, 35% asset owners and 18% intermediaries, Approximately 39% of respondents were headquartered in the Asia Pacific region, 33% were from Europe and 19% from North America.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Findings of the survey of global asset managers and asset owners show that more than three-quarters of respondents, which is 78%, said their organisation had a very risk-aware culture.
David Suetens, executive vice president and international chief risk officer at State Street said, "Investors and regulators will be reassured by the survey’s conclusion that asset owners and managers have improved their risk awareness ‘beyond recognition’ since 2008. But a mindset shift still needs to occur at many organisations to improve levels of trust and dialogue between the business and risk functions and ensure they are developing a real culture of risk-awareness across the whole enterprise."
The research found out that risk managers are not fully communicating their mission to the wider organisation and also that the risk function itself is keenly aware of this.
It has been identified that the important role played by a senior risk committee or governance body that brings together senior risk, compliance and audit representatives.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAccording to the survey findings, despite the significant shift in mindset, it has been acknowledged that closing this communication gap further will ensure that investment institutions can better fulfil their ongoing responsibilities to shareholders, clients and regulators.
