Changes in technology, policy and innovation provide big opportunities, but can also increase risk. View our executive summary to get an overview of the valuable insights that can lead to better business performance.

1. Risk in review | Executive summary 1
Enter
Risk in review
Decoding uncertainty,
delivering value
2015 executive summary

2. Risk in review | Executive summary 2
When risk becomes reward:
Driving performance and growththrough
proactive risk managment
Every year, PwC conducts a risk survey. This year, over 1,200 global business executives
and leaders shared views about the risk climate, their companies’ risk management
practices, and the key risks they’re worried about now and on the horizon. So what did
we uncover? A dichotomy, with a core of gold.
Why not? For some, it’s fear that a robust risk management strategy would slow them
down and prevent them from seizing opportunities. But our survey indicates otherwise:
The numbers don’t lie. Risk management leaders are fueling growth without
jeopardizing their business. But how exactly are they doing it? Let’s find out.
Risk is everywhere in today’s business environment—external and internal,
interconnected, growing, changing, and evolving.
Yet...
Companies are generally not responding to this riskier environment with improved
risk management programs.
1.
2.
3. The true risk management leaders—the 12% of executives we surveyed that
demonstrate the most developed, proactive, strategically aligned approaches to
risk management—reported significantly superior profit margins and annual profit
margin growth than other companies.
$

3. Risk in review | Executive summary 3
Risks are increasing dramatically and executives are
constantly faced with making decisions to protect
their businesses, while also trying to improve their
financial performance. By integrating risk
management into the business life cycle, these two
objectives can easily come together to work in unison.
Developing an effective strategy requires investment,
but the payoff and competitive advantage can be
enormous.
“
“
– Dean Simone, PwC Partner and Risk Assurance Leader

4. Risk in review | Executive summary 41
Oxford Economics, World Economic Prospects: Oil Price Slump Boosts Growth Forecasts (January 2015).
Growth is here for the taking
Though volatility and uncertainty are on the upswing, so is the trend toward growth. Among the executives we surveyed, the overwhelming majority
(76%) expect revenues to grow over the next two years. More money is landing in the pockets of global consumers, and the global growth forecast is
up to 2.9% from 2.6% last year.1
The companies in our survey are undertaking a variety of strategies to pursue this growth (see graphic), but each of those strategies comes with its own
risks—and our results suggest that some companies may not be striking the right balance between risk appetite and risk management. By focusing on
aggressive growth without also developing a strong risk management program, these companies can leave themselves vulnerable to mistakes.
Developing new prod-
ucts and services
Increasing marketing
and sales
Penetrating new
geographic market
segments
Increasing focus
on innovation
Applying new
technologies
Penetrating new
demographic
market segments
Mergers and
acquisitions
Revisiting pricing
strategies
Re-aligning the
business model
Adjusting the company’s
organizational structure to
be more responsive and
adaptable to change
56% 56% 54% 53% 48% 47% 43% 35% 35% 31%
The survey says: Respondent companies are taking diverse approaches to growth

5. Risk in review | Executive summary 5
Growth and risk are intertwined
The actions companies take in pursuit of growth generally
increase risk. But risk management leaders know better than to
enter a minefield without a map. Instead of stepping toward an
opportunity and just hoping it doesn’t explode, risk leaders
approach their growth plans with a firm understanding of their
risk appetite. They also take an enterprise-wide view of risk that
helps them understand how all their risks interconnect—includ-
ing those that could impact or catalyze other key risks to the
business.
This type of proactive, risk-enabled approach is especially
important in light of the speed with which technology is evolving.
The exponential growth of digital platforms has opened a new
world of sophisticated cybercrime and privacy threats, and is
requiring established industries to confront unfamiliar
technology risks when developing new products and operating in
new global markets and regulatory jurisdictions. Meanwhile, new
regulations are compelling new compliance needs, and third-
party risks are growing as companies engage innovative but
relatively less-established outsourcing vendors, contractors, and
sub-contractors. Without a risk-enabled approach to growth,
companies aren’t armed to take full advantage of the current
growth climate without opening themselves up to significant
threats.
Regulatory
complexity
Talent
availability
Cost
pressures
Reputation
risk
Geopolitical/
social unrest
Data security
privacy
Global economic
shifts uncertainty
Government
policy changes
Emerging
technology risk
Black swan
events
Macro challenge
Market challenge
77%
74%
69%
58%
66%
44%
69%
53%
59%
41%
The survey says: Respondents say the key threats to
business performance and growth are...

6. Risk in review | Executive summary 6
Risk leaders navigate through
risk to opportunity
Risk leaders have learned how to flip the script.
Instead of seeing risk management as a roadblock standing in the
way of growth, they’re using it as a tool to accelerate performance
and drive growth. Among the companies we surveyed, those that
are growing most quickly are nearly twice as likely to report they
are developing sophisticated and robust risk management tools and
processes.
And here’s the money quote: Over the past three years,55% of risk
management leaders recorded increased profit margins compared
with only 43% of non-leaders, and 41% of leaders achieved an
annual profit margin of more than 10%, compared with only 31%
of non-leaders.
Risk leaders have increased their profit
margins over the past three years
They understand the domino effect of risk,
and incorporate risk complexities into
strategic, financial, and operational goals
Risk leaders have an integrated
understanding of their own risk appetite
across a range of areas
They’re increasingly taking a risk-
enabled approach to growth
Risk leaders are posting greater
performance while leveraging best risk
management practices
The survey says: How risk management leaders win

7. Risk in review | Executive summary 7
Where risk leaders
get it right
Four leading practices that
distinguish the best of the best

8. Risk in review | Executive summary 8
1. Risk leaders understand
that risks are interconnected
Leaders understand risk as a web of interlocking pitfalls and
possibilities, and make business decisions based on an
enterprise-wide view of risk that gives them a clear and realistic
understanding of operational issues and market opportunities.
The ability to manage and reduce risks at each level of business,
with both immediate and long-term benefits to the company as
a whole.
Result
of the leaders surveyed (vs. 23% of
non-leaders) are able to see how a threat to one
business unit may threaten or affect others.
The survey says: How risk leaders comprehend threats and risk
of the leaders surveyed (vs. 27% of non-leaders)
are able to take a comprehensive view of risk
across relevant business functions when
making decisions.
70% 73%
“Whencompaniesbuildariskmanagementecosystemthathelps
themtooptimizetheirbusiness,theyhavemorecertaintyaround
thedecisionstheymake.Andwhenyouhavecertaintyithelpsyou
movemorequickly,becauseyouknowwhatiscomingnext.”
– Jason Pett, PwC Partner and Internal Audit Leader

9. Risk in review | Executive summary 9
2. Risk leaders align risk
management to the business
Good risk strategy equals good business strategy. The vast
majority of risk leaders (90%) have deep alignment between
risk management and the company’s strategic planning process,
compared with just 36% of non-leaders. Leaders also
demonstrate greater cross-functional alignment, and leaders are
more than twice as likely as non-leaders to leverage their risk
management programs during the strategic planning process
(78% vs. 38%).
With strategies aligned, executives are able to make confi-
dent, rapid-fire business decisions informed by highly
sophisticated risk evaluation.
Result
“Integratingriskmanagementintothelifecycleofyourbusiness
givesyoutheopportunitytodotwothings.First,ithelpsyou
understandtheimplicationofriskatthepointofdecisionrather
thanafterward.Andsecond,itallowsyoutomoveveryquickly
andconfidently,knowingthatyou’veanticipatedtheriskandare
lesslikelytohavemadeamistakethatcouldslowyoudown.”
– Dean Simone, PwC Partner and Risk Assurance Leader
of risk leaders (vs. 36% of non-leaders)
have deep alignment between risk management
and the company’s strategic planning process.90%

10. Risk in review | Executive summary 10
3. Risk leaders strive to be
proactive, not reactive—they
bring the right tools to the job
Forty-six percent of risk leaders say they spend more
time calculating and preparing for risk than reacting
to it (vs. just 21% of non-leaders), and to do so, they
have armed themselves with a variety of sophisticated
tools and techniques.
Businesses that are proactive with risk can grow
sustainably in a volatile global marketplace.
Result
The survey says: Risk leaders have controls and practices in place to harness risk
can identify and forecast
emerging risks
(vs. 59% of non-leaders)
are building organizational
resilience to risk
(vs. 42% of non-leaders)
are monitoring key
risk indicators
(vs. 27% of non-leaders)
use risk ratings
(vs. 62% of non-leaders)
have horizon scanning / early
warning indicators
(vs. 33% of non-leaders)
are engaged in
scenario planning
(vs. 33% of non-leaders)
conduct stress testing
(vs. 30% of non-leaders)
96%
88%
80%
96%
81%
77%
75%
“Whenexecutiveshavethepowertocollecttheright
dataandsynthesizethisdataintoactionable
intelligence,theyareempoweredwithadeeper
understandingoftheirbusinessandofthedrivers
thatimpactperformance.Wecannowdothingsthat
weren’tpossibleadecadeago.Thisallowsformuch
betterdecision-making.”
– John Sabatini, PwC Principal and Risk and Compliance Systems and
Analytics Leader

11. Risk in review | Executive summary 11
4. Risk leaders know their risk appetite,
and are willing to take chances
Risk leaders have a formal, well-understood risk appetite framework
that clearly defines the level of risk the organization is prepared to
accept in relation to its overall risk capacity.
Understanding their risk tolerances gives executives greater clarity
and confidence about how their risks are being managed—and that
gives risk leaders a higher appetite for risk than non-leaders.
Fast, confident, risk-informed decision-making can help companies
compete more effectively in a rapidly evolving business climate.
Result
of risk leaders have a corporate risk appetite statement
that is well communicated and understood
(vs. 20% of non-leaders).68%
“Undertakingasystematicreviewthatdetermineswhataggregated
levelofriskacompanyiswillingtotakeon—andensuringthatall
businessunitsunderstandthoselimits—remainsacentraltenetofrisk
managementleadership.”
– Brian Schwartz, PwC Principal and Risk Assurance Performance Governance,
Risk and Compliance Leader

12. Risk in review | Executive summary 12
Risk-enabled growth:
Boosting performance through risk management
Risk accompanies growth at every turn, but management of
risk should never slow the path to growth. Companies that take
a risk-enabled approach to growth, linking business risk to their
strategic imperatives, can drive efficiency and generate higher
profit margins than their competitors.
According to this year’s Riskinreview survey, only 12% of
survey respondents have put in place the processes and
structurestomaketheircompaniestrueriskmanagementleaders.
The key to joining that group is a proactive approach that inte-
grates risk management into the life cycle of the business, bring-
ing a holistic, risk-enabled view to strategic decision-making.
“Businessleadersseethelandscapetodayasoneof
boththreatandopportunity,inroughlyequal
proportions.Tosurviveandevolveinthis
environment,companiesneedtopreparetheirentire
organizationstotakeadvantageofbigshiftsaheadof
thecompetition.”
– Dennis Chesley, PwC Global Risk Consulting Leader

13. Risk in review | Executive summary 13
Inside the survey report
Explore PwC’s Risk in review to learn more about leveraging
your unique risk appetite into stronger performance.
The report provides insights
on topics such as:
Additionally, you can:
• Identifying the risks worth taking
• Surveillance systems
• Heat maps and dashboards
• Ad hoc analytics
• Avoiding typical pitfalls
• Gaining a competitive edge
• Achieving long-term profits
• Interact with key data from the 147 respondents who
logged higher profits and better risk management
• Learn how Ryan Zanin, Chief Risk Officer at GE
Capital, manages a riskier world
• Learn about our three-tiered approach to avoid
drowning in data
• Learn how risk officers can gain tools for creating an
effective GRC framework that delivers results
• Benchmark your business

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Risk in review | Executive summary 14
Are you prepared?
Dean Simone, Partner
US Risk Assurance Leader
John Sabatini, Principal
US Risk Assurance – Risk and
Compliance Systems and
Analytics Leader
Todd Bialick, Partner
US Risk Assurance –
Third Party Assurance Leader
Brian Schwartz, Partner
US Risk Assurance –
Performance Governance,
Risk and Compliance Leader
Jason Pett, Partner
US Risk Assurance –
Internal Audit Leader
Grant Waterfall, Partner
US Risk Assurance – Cybersecurity
and Privacy Strategy Leader
dean.c.simone@us.pwc.com
267 330 2070
john.a.sabatini@us.pwc.com
646 471 0335
todd.bialick@us.pwc.com
973 236 4902
brian.schwartz@us.pwc.com
202 729 1627
jason.pett@us.pwc.com
410 659 3380
grant.waterfall@us.pwc.com
646 471 7779
In a world of increasing risk, your executive decisions
are only as good as your strategy and preparation.