Even as globalization poses greater risks to multinationals, most companies acknowledge that they don't have the resources in place to manage geopolitical, strategic and operational risks effectively, according to two recent surveys.
A massive IBM Corp. survey of 1,200 corporations in 79 countries revealed that nearly two-thirds of companies with more than $5 billion in revenue experienced major risks during the past three years, and only half the responding CFOs and senior finance executives said they were prepared to handle such events. Separately, more than half those responding to an Aon Global Risk Management Survey said they don't have any programs to handle the risk that they rate most worrisome–damage to reputation–and 30% said they are unprepared to deal with their second-biggest concern: business interruption.
"The lack of preparedness is both surprising and somewhat worrying," says Ruth Joplin, Aon Global Risk consulting managing director.
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