Corporate & Securities Law

Federal Reserve Chairman Ben Bernanke said yesterdayThursday that the credit crisis has exposed weaknesses in many financial firms? risk-management practices. ?For risks to be successfully managed, they must first be identified and measured,? Mr. Bernanke noted in a speech. ?Recent events have revealed significant deficiencies in these areas.?

Apparently, those deficiencies exist at businesses which specialize in identifying and measuring risks. A new survey conducted by consulting firm Towers Perrin found CFOs at insurers are still woefully behind in weighing enterprise risk when making business decisions.

?Although many life companies have made progress in such areas as risk identification, prioritization and measurement, few are achieving the desired full potential of enterprise risk management (ERM) as a management tool,? concluded Towers Perrin, which surveyed CFOs at 38 large and midsize North American life insurance companies.

For example, 83% of those CFOs said their company lacked the tools necessary to measure value creation from ERM. More than 70% said they had not yet aligned ERM with performance incentives.

Survey: Enterprise risk management still a blind spot for insurance CFOs

Full post as published by inside Sarbanes Oxley on May 29, 2008 (boomark / email).