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Airmic: many boards fall short of latest risk guidance

Airmic has published the results of its latest salary and status survey. Among the key findings are that: over half UK boards don’t sign off their company’s enterprise risk management programmes; the role of the risk professional is expanding; and average salaries continue to rise.

Despite senior executives now being required to take a more proactive role in their company’s risk management, the survey found that only 44 percent of boards authorise their enterprise risk management programmes. A significant number still rely on audit committees or do not get sign off at all.

The percentage of boards which authorise their company’s spend on insurance premiums is higher, at 55 percent. However, 12 percent of companies reported that they do not get a formal sign-off of their insurance programme at all.

“Recent guidance from the Financial Reporting Council (FRC) makes clear that boards must now have ultimate responsibility for risk management.” Paul Hopkin, Airmic technical director commented. “In particular, the guidance says boards must be responsible for ‘ensuring the design and implementation of appropriate risk management and internal control systems’.

“The FRC has avoided being too prescriptive in its guidance, but our survey suggests that more boards will need to authorise their risk management programmes in the future,” Hopkin added.

There has been a steady move upwards in the average salary awarded to risk and insurance managers. Only 32 percent of Airmic members earn less than £70,000: down from 48 percent in 2012 and 54 percent in 2008. Meanwhile, the percentage of Airmic members earning over £100,000 has risen slightly from 24 percent in 2012, to 28 percent this year.

However, although basic salaries have increased between 2012 and 2014, bonuses are less lucrative and as a result the overall remuneration package for risk managers has reduced in several sectors, notably the mining sector which has been overtaken by the leisure, hotel & travel industry as the most lucrative sector for risk managers.

Interestingly, there appears to be a downward trend in the percentage of risk professionals with risk or insurance qualifications. The percentage of members with a CII qualification has fallen from 45 percent in 2008 to 39 percent this year. Similarly, 22 percent of respondents had an IRM qualification, down from 27 percent in 2008. However, broader business qualifications such as the MBA have increased in popularity.

http://www.airmic.com

•Date: 10th December 2014 • UK •Type: Article • Topic: Enterprise risk management


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