Non-financial Risks 'Need to be More Closely Monitored'
A number of the UK’s publicly listed companies have not been monitoring non-financial business risks according to Covalent Software, a provider of corporate management applications.
Covalent’s risk research into the annual reports of FTSE 100, FTSE 250 and AIM 100 companies reveals that only 35% of the 20 most commonly monitored risks by these organisations are non-financial. Given recent high profile incidents surrounding non-financial issues, such as the Toyota car recalls and closing of airports during the snow, Covalent warns that companies need to monitor these non-financial risks in the same way they do things like the economic climate and inflation.
Peter McHugh, chief executive officer (CEO) and founder, Covalent Software, said: “The direct impact to a company’s bottom line that failure to mitigate financial risks would have, rightly makes them high on the agenda for companies of all sizes. However, there are a wide variety of non-financial risks that are not being monitored as closely as they should be, which could also have a major detrimental effect on an organisation.”