Shipping needs to improve risk management — Moore Stephens

A recent risk survey by Moore Stephens has shown that shipowners need to up their ante in risk management.

The second annual Moore Stephens Shipping Risk Survey has revealed a fall in the overall level of satisfaction on the part of respondents that sound risk management had contributed to the success of their organisations.

The survey also showed that the involvement of senior management in managing risk at the highest level also declined against last year.

Respondents to the survey rated the extent to which enterprise and business risk management is contributing to the success of their organisation at an average 6.6, on a scale of 1 (low) to 10 (high), compared to 6.9 last time. Under a quarter of respondents (23 per cent) returned a rating of 8.0, compared to 26 per cent last time, while 70 per cent put the figure at more than 5.0 out of 10.0, as opposed to 74 per cent in 2015.

Overall, respondents rated the extent to which enterprise and business risk was being managed effectively by their organisations at 7.0 out of 10.0 (unchanged from last time).

Demand trends were deemed by the greatest number of respondents to pose the highest level of risk to their organisation, closely followed by competition, with the cost and availability of finance in third place.

“The survey revealed that risk is being managed effectively within a high percentage of those organisations which participated in the survey. It is nonetheless disappointing to find that confidence in the level to which enterprise and business risk management contributes to the success of shipping organisations has fallen slightly in the past 12 months. So, too, has high-level involvement by senior managers,” Michael Simms, Moore Stephens Partner, Shipping & Transport, said.

Simms added that the current rating of 7.0 out of 10.0 in respect of the level of effective management of risk at companies which participated in the survey is not too discouraging, however, “it needs to be higher, as does the figure of just over 40 per cent of companies which formally document the management of risk.”



Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.

..