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Lloyd’s risk report reveals fear of the unknown

Global business leaders are confident they can handle internal risks related to their own companies, but fear events outside of their control, according to a Lloyd’s report on risk management.

It found directors are comfortable managing internal risks such as reputation and corporate liability, but are less certain about external events such as currency fluctuation and cancelled orders.

The report was prepared in conjunction with the Economist Intelligence Unit and polled 570 board executives worldwide.

Lloyd’s Chairman Lord Levene said while good risk management will help to minimise internal factors, directors should consider risk management in relation to “suppliers, customers and other stakeholders to ascertain how their behaviour will resonate with the company”.

The report identifies a “potentially great disparity” between perceived and actual threats facing business leaders, and notes that short-term risks should not overshadow long-term risk such as climate change.

The report will form the basis of a Lloyd’s 360 Riskmap, an online facility to be launched next year allowing users to track emerging global risk patterns.