Expectations ofRisk ManagementOutpacing Capabilities –It’s Time For Action

KPMG INTERNATIONAL

2© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

In which countries are the survey respondents located? *

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

3© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

In which regions are the survey respondents located?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

4© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

What is your organization’s primary industry/sector?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

5© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

What is your organization’s primary industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

6© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

What are your organization’s global annual revenues in US dollars?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

7© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following best describes your title?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

8© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following issues pose the greatest threat to your industry? *

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

9© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following issues pose the greatest threat to the Financial Services industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

10© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following issues pose the greatest threat to the Healthcare industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

11© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following issues pose the greatest threat to the Energy and Natural Resources industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

12© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following issues pose the greatest threat to the Diversified Industrials industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

13© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following issues pose the greatest threat to the TMT industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

14© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following risk scenarios pose the greatest threat to your industry? *

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

15© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following risk scenarios pose the greatest threat to the Financial Services industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

16© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following risk scenarios pose the greatest threat to the Healthcare industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

17© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following risk scenarios pose the greatest threat to the Energy and Natural Resources industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

18© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following risk scenarios pose the greatest threat to the Diversified Industrials industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

19© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following risk scenarios pose the greatest threat to the TMT industry?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

20© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Compared to your peers, how would you rate the maturity of your risk management program based on the following factors?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

21© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How do you measure the return on investment (ROI) in your risk management program?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

22© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How does the level of investment in risk management (as a percentage of revenues) at your organization today compare to three years ago?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

23© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How do you anticipate the level of investment in risk management will change at your organization over the next three years?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

24© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

To what degree have regulatory changes caused change in your organization’s risk management and reporting processes over the past two years?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

25© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

What does your organization need to do to improve adherence to regulations?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

26© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How often are risk management considerations factored into your organization’s strategic planning decisions?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

27© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How effectively is your organization able to develop stakeholders’ understanding of your risk program?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

28© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How would you rate the risk and compliance culture at your organization to ensure that employees in all functions are aware of risk when making business decisions?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

29© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

To what degree is the compensation incentive structures of business line employees (i.e, marketing, sales, etc) at your organization linked to effective risk management?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

30© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How is the risk profile of your organization developed and aggregated?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

31© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How would you rate your organization’s ability to identify, assess and manage both current and emerging risks?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

32© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

What do you view as the biggest challenges to effective data collection and analysis for risk management purposes within your organization?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

33© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

To what do you attribute your organization’s success in effectively communicating risk issues to the Board level?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

34© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

To what do you attribute your organization’s weaknesses in effectively communicating risk issues to the Board level?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

35© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Is strategic risk and the actions in place to manage strategic risk included in the risk management reporting to the Board?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

36© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

To what extent has your organization developed a formal risk appetite statement?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

37© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following best reflects your view of risk management’s contribution to your organization?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

38© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following factors has the strongest influence over your organization’s interest in converging its risk and control functions (i.e., risk management responsibilities across all lines of defense)?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

39© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Which of the following do you consider to be the most significant barriers to greater convergence of risk and control functions at your organization?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

40© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

How important do you consider a technology enabler/tool to be to successfully integrate risk management across the organization?

Source: Expectations of Risk Management Outpacing Capabilities – It’s Time For Action, 2013

Thank you

© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firmsof the KPMG network of independent firms are affiliated with KPMG International. KPMGInternational provides no client services.

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