Mr Hepburn said: “All too often attitudes to risk are formed by last year’s crisis and this year’s headlines. Risk reporting should be a powerful tool to explain to investors how a company is protecting itself from the downside.”
Key findings include:
* Perceptions of risk tend to emphasise the repetition of prior crises over future likelihoods
* Proximity bias conditions us to focus on risks that are topical rather than those which may have an immediate and material impact
* Annual reports – and by extension, company boards – are not accurately identifying risks
* Corporate risk functions should be given a greater voice in decision making
* Institutional investors’ increasing emphasis on sustainability, resilience and stewardship may be too narrowly focused
Click here to read the full article covering our recent report into corporate reporting and attitudes to pandemic risk. Or click here to access the report.