Unpredictability around future earnings remains.
That is the clear message coming from the corporate treasury and finance executives surveyed for the 2016 AFP Risk Survey, a report prepared by the Association for Financial Professionals (AFP) with the support of Marsh & McLennan’s Global Risk Center.
Selected Survey Findings
- 52% of companies are exposed to greater earning uncertainty compared to three years ago
- The top-rated risk factors for corporate earnings are political and regulatory uncertainty, increased competition, and customer satisfaction and retention
- Commodity risk is rising and 19% of respondents rate commodities, (energy, agricultural, metals) as a primary driver of earnings uncertainty – up from the 11 percent in the 2015 survey
- Only half of organizations currently have plans in place to respond to and reduce the potential impact of interest rate and commodity risks
As the report reveals, many organizations may be insufficiently prepared to respond to the impacts of such risks. In an environment of persistent unpredictability, organizations must renew their focus on improved risk analytics and work to integrate their analysis into the broader context of strategic decision-making.
