With the financial crisis exposing a barrage of complex issues from fraud and misdemeanour to corporate excesses, the business of managing risk has turned a corner for many companies, moving to the top of chief executives' agendas as corporations fight for survival.
'For banks especially, risk management is no longer only used to satisfy regulatory requirements. Corporations now see it as a way of helping them to improve business too,' said Mike So, associate professor at Hong Kong University of Science and Technology's department of information systems, business statistics and operations management.
Organisations are pouring funds into upgrading their risk management, implementing key operational and technological systems across the board and hiring top-notch professionals to manage their risks, particularly in the current economic climate.
Peter Koo, a partner at Deloitte China who is responsible for enterprise risk services, has seen the downturn trigger more requests for the company's consulting services in liquidity and operational risk, and technology and security risk.
Much of the demand has emerged from the financial services industry, listed companies and the public sector, with an emphasis on areas such as enterprise risk management, corporate governance and information technology governance. 'Risk management has become an indispensable tool to companies' overall corporate strategies,' Mr Koo said.
Deloitte offers three types of risk management training to its clients. These comprise coaching at the executive level to ensure senior directors understand the complexities of compliance, training of frontline professionals so they can help execute smooth and ethical operations, and company-wide education to make sure every member of staff has a clear grasp of what risk management is.
'Risk management is particularly important in a downturn because whoever can manage risk the best ultimately wins,' Professor So said.