Regulation becomes top risk for businesses
Regulatory and legislative change has become the biggest threat to Australian businesses, with the cost burden gathering pace before companies have time to adjust, a risk survey has revealed.
After ranking third on Aon’s Australian Risk ladder last year, regulation became the most prominent concern in 2013-14, ahead of economic conditions and people risk, the survey of 380 businesses showed.
The elevation of regulatory risk reflects the quick and often severe impact changes have had on businesses’ bottom lines, Aon Risk Solutions Australia CEO Lambros Lambrou said.
“Regulatory and legislative change has been moving up consistently through the top 10 risks over the past few years,” Lambrou said.
He said given the rapidly changing environment, it was imperative that companies had efficient infrastructure in place to deal with regulatory and legislative developments.
“Having the systems in place to support effective risk management is increasingly a determinant of a business’ ability to succeed in fast-moving and challenging times. And not all such systems are created equal,” Lambrou said.
“There is a clear and direct correlation between risk management performance and favourable financial results when analysing return on shareholder equity.
“Developing innovative and robust risk management strategies therefore makes extremely good business sense.”
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